BR549 - Firstly, thanks for the help.  I had hoped someone from Mach3 would be on the form to look into the bug.
The code you pasted in doesn't work properly.  Instead of alternating a correct and incorrect circle, now it only makes incorrect circles.  You can add a line G1 X1 Y1 to create a one inch reference point for the proper size of the circle.  In your example the radius should be .5 inches, but when adding the reference point of 1 inch you can see the circle is really over two inches instead of 1/2.
Jeff