I recognize a lot of your story from my 7GH jalap flash with the standard 1.2.5 FW, then I tried ckolivas' 1.2.5 and all was well again. Let the case front/sides and back plate off though, as the top plate, and have the fan blowing down getting 8.25GH average at 30-31C.
Thanks for the tip, I did end up trying ckolivas 1.2.5 and it improved the HW error rate quite a bit on the one working ASIC lol.

Should have flashed that version right from the get-go. Other ASIC still doesn't even seem to be recognized, though.
Heatsink was snugged down tight and everything looked good when I had the case off. Only potential problem I can think of is one of the ASICs isn't entirely covered by the aluminum heatsink, actually a thread on the BFL forums about this. I didn't think too much of it when I first got it and opened it up since I didn't figure BFL would ship them out like this if it could cause problems, but almost wonder now if maybe that created hotspots on the ASIC or caused it to get hot enough to go belly up. Of course quieter/lower RPM fan and overclocking probably didn't help either, but for all I know it would have gone out sooner rather than later because of this even running it stock.