Problem with "Y" axis

The PCB is a 1 inch X 1 inch square, with a small square down in the lower left corner. From that corner to the opposite corner (upper right) is a straight line. The "G" code program has a line from the lower left corner down about one inch and to the left about 1/2 inch. Reference "0".
When the program starts , "Y" does NOT move until "X" travels the full length of the tail and starts working around the one inch square. However, Mach 3 display window shows both "X and Y" moving perfectly.
Once the program is finished it stops at its last line inside the one inch square. When one presses "Go to 0", the "X" axis goes to "0" but the "Y" axis moves in a negative direction 2.822 inches.
Here is the "G code" of this program::

( This gcode generated by C:/Program Files/EAGLE-5.11.0/ulp/pcb-gcode.ulp )
( Copyright 2005 by John Johnson. See readme.txt for licensing terms. )

( This file generated from the board C:/Documents and Settings/RICHARD SALES/My Documents/eagle/RAS TEST/RAS 1.brd )
( This file generated 4/15/2011 9:56:26 AM )

G20

G90
G00 Z0.5000
G00 X0 Y0
M03
G04 P3.000000
G00 Z0.0200
G00 X1.9869 Y2.5131
G01 Z-0.0100 F10.00
G01 X1.2131 Y2.5131
G01 X1.2131 Y2.6946
G01 X1.9869 Y3.4684
G01 X1.9869 Y2.5131
G00 Z0.0200
G00 X1.0131 Y3.4869
G01 Z-0.0100 F10.00
G01 X1.9684 Y3.4869
G01 X1.1946 Y2.7131
G01 X1.0131 Y2.7131
G01 X1.0131 Y3.4869
G00 Z0.0200
G00 X1.1869 Y2.5131
G01 Z-0.0100 F10.00
G01 X1.0316 Y2.5131
G01 X1.1869 Y2.6684
G01 X1.1869 Y2.5131
G00 Z0.0200
G00 X1.0131 Y2.6869
G01 Z-0.0100 F10.00
G01 X1.1684 Y2.6869
G01 X1.0131 Y2.5316
G01 X1.0131 Y2.6869
G00 Z0.0200
G00 X1.9819 Y2.5181
G01 Z-0.0100 F10.00
G01 X1.2181 Y2.5181
G01 X1.2181 Y2.6925
G01 X1.9819 Y3.4563
G01 X1.9819 Y2.5181
G00 Z0.0200
G00 X1.0181 Y3.4819
G01 Z-0.0100 F10.00
G01 X1.9563 Y3.4819
G01 X1.1925 Y2.7181
G01 X1.0181 Y2.7181
G01 X1.0181 Y3.4819
G00 Z0.0200
G00 X1.1819 Y2.5181
G01 Z-0.0100 F10.00
G01 X1.0437 Y2.5181
G01 X1.1819 Y2.6563
G01 X1.1819 Y2.5181
G00 Z0.0200
G00 X1.0181 Y2.6819
G01 Z-0.0100 F10.00
G01 X1.1563 Y2.6819
G01 X1.0181 Y2.5437
G01 X1.0181 Y2.6819
G00 Z0.0200
G00 X1.9769 Y2.5231
G01 Z-0.0100 F10.00
G01 X1.2231 Y2.5231
G01 X1.2231 Y2.6904
G01 X1.9769 Y3.4442
G01 X1.9769 Y2.5231
G00 Z0.0200
G00 X1.0231 Y3.4769
G01 Z-0.0100 F10.00
G01 X1.9442 Y3.4769
G01 X1.1904 Y2.7231
G01 X1.0231 Y2.7231
G01 X1.0231 Y3.4769
G00 Z0.0200
G00 X1.1769 Y2.5231
G01 Z-0.0100 F10.00
G01 X1.0557 Y2.5231
G01 X1.1769 Y2.6442
G01 X1.1769 Y2.5231
G00 Z0.0200
G00 X1.0231 Y2.6769
G01 Z-0.0100 F10.00
G01 X1.1442 Y2.6769
G01 X1.0231 Y2.5557
G01 X1.0231 Y2.6769
G00 Z0.0200
G00 X1.9719 Y2.5281
G01 Z-0.0100 F10.00
G01 X1.2281 Y2.5281
G01 X1.2281 Y2.6884
G01 X1.9719 Y3.4322
G01 X1.9719 Y2.5281
G00 Z0.0200
G00 X1.0281 Y3.4719
G01 Z-0.0100 F10.00
G01 X1.9322 Y3.4719
G01 X1.1884 Y2.7281
G01 X1.0281 Y2.7281
G01 X1.0281 Y3.4719
G00 Z0.0200
G00 X1.1719 Y2.5281
G01 Z-0.0100 F10.00
G01 X1.0678 Y2.5281
G01 X1.1719 Y2.6322
G01 X1.1719 Y2.5281
G00 Z0.0200
G00 X1.0281 Y2.6719
G01 Z-0.0100 F10.00
G01 X1.1322 Y2.6719
G01 X1.0281 Y2.5678
G01 X1.0281 Y2.6719
G00 Z0.0200
G00 X1.9669 Y2.5331
G01 Z-0.0100 F10.00
G01 X1.2331 Y2.5331
G01 X1.2331 Y2.6863
G01 X1.9669 Y3.4201
G01 X1.9669 Y2.5331
G00 Z0.0200
G00 X1.0331 Y3.4669
G01 Z-0.0100 F10.00
G01 X1.9201 Y3.4669
G01 X1.1863 Y2.7331
G01 X1.0331 Y2.7331
G01 X1.0331 Y3.4669
G00 Z0.0200
G00 X1.1669 Y2.5331
G01 Z-0.0100 F10.00
G01 X1.0799 Y2.5331
G01 X1.1669 Y2.6201
G01 X1.1669 Y2.5331
G00 Z0.0200
G00 X1.0331 Y2.6669
G01 Z-0.0100 F10.00
G01 X1.1201 Y2.6669
G01 X1.0331 Y2.5799
G01 X1.0331 Y2.6669
G00 Z0.0200
G00 X1.9619 Y2.5381
G01 Z-0.0100 F10.00
G01 X1.2381 Y2.5381
G01 X1.2381 Y2.6842
G01 X1.9619 Y3.4080
G01 X1.9619 Y2.5381
G00 Z0.0200
G00 X1.0381 Y3.4619
G01 Z-0.0100 F10.00
G01 X1.9080 Y3.4619
G01 X1.1842 Y2.7381
G01 X1.0381 Y2.7381
G01 X1.0381 Y3.4619
G00 Z0.0200
G00 X1.1619 Y2.5381
G01 Z-0.0100 F10.00
G01 X1.0920 Y2.5381
G01 X1.1619 Y2.6080
G01 X1.1619 Y2.5381
G00 Z0.0200
G00 X1.0381 Y2.6619
G01 Z-0.0100 F10.00
G01 X1.1080 Y2.6619
G01 X1.0381 Y2.5920
G01 X1.0381 Y2.6619
(File Footer)
G00 Z0.0200
G00 Z0.5000
M05
M02