After debugging positions and velocities between the various layers of OpenSimulator today, it appears that things are slightly better then I previously thought right now.
It looks like there's an error with ZeroFlag in one spot in UpdatePositionAndVelocity in ODEPrim that, when a prim is rezzed and made physical, causes it to drop through the terrain.
It also looks like there's an issue.. where if you drag the hand cursor over a prim the 'right' way, the SOG/SOP and ODEPrim no longer synchronize again. If you bump the prim with your avatar where you would expect it to be, physics knows where the object is.. but the SOG/SOP doesn't. So, that's our break. Some kind of reference loss. Isolating the specific state where this occurs should be an interesting task tomorrow, however, I think I've discovered enough for one day.
06:27:40 - !ZeroFlag <116.5574, 106.5194, 21.29421>
06:27:40 - !ZeroFlag <116.7664, 106.5418, 21.3075>
06:27:40 - !ZeroFlag <117.0615, 106.5566, 21.3036>
06:27:40 - !ZeroFlag <117.3505, 106.5721, 21.30312>
06:27:40 - !ZeroFlag <117.6379, 106.5873, 21.30292>
06:27:40 - !ZeroFlag <117.9243, 106.604, 21.30146>
06:27:40 - !ZeroFlag <117.9579, 106.6056, 21.30099>
06:27:41 - !ZeroFlag <117.9578, 106.6032, 21.30212>
06:27:41 - !ZeroFlag <118.1797, 106.6338, 21.31411>
06:27:41 - !ZeroFlag <118.4731, 106.6529, 21.30904>
06:27:42 - !ZeroFlag <118.7649, 106.6682, 21.30845>
06:27:42 - !ZeroFlag <119.0538, 106.6863, 21.30784>
06:27:42 - !ZeroFlag <119.3399, 106.699, 21.30552>
06:27:42 - !ZeroFlag <119.3714, 106.6974, 21.30613>
06:27:43 - !ZeroFlag <119.3718, 106.6955, 21.30722>
06:27:43 - !ZeroFlag <119.6014, 106.6931, 21.31141>
06:27:43 - !ZeroFlag <119.8856, 106.7092, 21.31145>
06:27:43 - !ZeroFlag <120.1725, 106.7264, 21.31157>
06:27:43 - !ZeroFlag <120.2315, 106.7134, 21.33288>
06:27:43 - !ZeroFlag <120.2231, 106.6987, 21.32208>
06:27:43 - !ZeroFlag <120.2056, 106.7055, 21.30926>
06:27:43 - !ZeroFlag <120.1871, 106.7195, 21.29576>
06:27:43 - !ZeroFlag <120.1709, 106.7317, 21.282>
06:27:45 - !ZeroFlag <120.1709, 106.7309, 21.28252>
06:27:45 - !ZeroFlag <120.3771, 106.7588, 21.27705>
06:27:45 - !ZeroFlag <120.6764, 106.7718, 21.27605>
06:27:45 - !ZeroFlag <120.9664, 106.7914, 21.27538>
06:27:45 - !ZeroFlag <121.2548, 106.8121, 21.27536>
06:27:45 - !ZeroFlag <121.3039, 106.814, 21.29639>
06:27:45 - !ZeroFlag <121.2975, 106.8158, 21.28955>