Brian,
The problem is fairly easy to reproduce with the file. Since, during a test, I am not cutting any real material and the movement is not large, it is pretty safe to do live, and I watch the motion of the head. The pattern cuts several shallow holes using multiple passes for each hole. I don't press ESCAPE or FEED-HOLD in this procedure. I am currently using a touch screen to press the buttons, but have observed this problem using a PS2 mouse. I do not have a hardware START and STOP.
1) I load the G-Code, zero X, Y, & Z near the center of the table, touch REWIND, touch GOTO-Z, and touch START
2) I then wait until cutting a circle and touch STOP (on the screen)
3) if the error is not observed, I press START (I don't bother restarting the motor or repositioning anything) and then repeat step 2.
I was able to get it to fail about one of every four tries, and never had to let it go on to the second hole.
The PC is a 500MHz 1999 vintage machine running XP-home. My 1.8GHz laptop was able to do the same thing.
I am running Mach3 2.0.1i on both.
Thanks.
Bill