It seems like if I hit the Feed Hold button on Mach3, the machine is stopping before finishing its current move.  However, the coordinates are wrong.  I think what happened is the coordinates point to the end of the move it never finished. 

Anybody else see this, and is there a way to work around it?

I have never seen that problem myself and its the first I have heard of it. What version of Mach are you using also what version of plugin. If you include your xml and code that it happens with I will try and see if I can replicate it.
Hood

If you are using Feed hold and tool offsets you will have problems right now. Brian has explained this has something to do with how/when the tool offsets are applied. I think 4.0 will have completely new code for offsets.

I'll take a look again.  I kinda had the idea this was going to be a known problem for some reason, but I'll go through it with some more formal tests to see if it's actually doing what I thought.