Have you done a hardware test, just to rule out bad memory?
I think the sequence of getting to the hardware test is Ctrl-T on empeg bootup, but I believe that Tony can validate this for me.

I had one of the original MkII's with the bad batch of Ram, and it actually didnt interfere with the player, only when synching (and that was intermittent until the memory completely went), so the memory could be affecting displayserver.

My guess, but then my guess may be out to lunch.