I am the original poster of this thread and want to leave a bit of an update in case someone else is having similar troubles. I haven't figured out my M1 system's problem, but I have learned how to work around some of the issues. At the moment, my observations are not certain so take what I say with a grain of salt. I mis-identified the circumstances blaming firmware updates. Instead I think that adding a zone or two performed around the same time as the firmware updates was the tipping point. Years ago, I configured the system with two areas--one area for the main house and another area for the unfinished walk-out basement. The unfinished walk-out basement is left armed most of the time and only disarmed when needed.
Here is what is going on: When both areas are disarmed, my M1 reports ethernet trouble and ethernet restore with extreme frequency. When the basement area (common to the main house) is armed, the cycle of ethernet trouble/restore goes away. Also if the basement is disarmed, I have trouble connecting to the M1 with the XEP. This problem too goes away when the basement is armed. What I have discovered is that my M1 constantly reports all zones status across the RS232 serial bus when the basement is disarmed. When the basement area is armed, the chatter across the RS232 bus drops to only real zone change. In other words, common area disarmed results in a constant cycle of full zone reporting and common armed results in only zone status change. I don't know why it does this. Sniffing the RS232 bus, I can see the handshake between the M1 and XEP when the common area is armed, but I cannot see the handshake when the common area is disarmed. I believe there is too much data going across the RS232 serial bus with the constant cycle of full zone reporting, and it disrupts the Q2 min requirement of handshaking between the M1 and XEP. My suspicion is that a large number of zones in the system being constantly and fully reported across the RS232 serial bus takes too much time interfering with the handshake. As of this writing, I have just turned off the error beeping and learned to live with the issues. My guess is that the troubles would go away if I set the globals to not report this much data across the RS232 serial bus. I have more troubleshooting to do with the system, so there will be more to the story.