Excellent information everyone. I actually had TWO separate issues as noted below.
* For whatever reason MIDI-OX PORT ROUTING had the USB Audio In and Out connected. Thus the MIDI LOOP that Dmitri correctly diagnosed. Thankfully, this isn't specifically my fault. If you start with only the OUT selected as a device, then select the IN then MIDI-OX automatically creates that routing for you. Heh, I thought I did it.

as I did recently undo the multi-port routing to allow MCT and VST host to both receive MD MIDI data. And when I did MIDI-OX created a ton of routing, I removed ALL of the default routing, and created my own. But I do not specifically recall connecting the In and Out together, but it's entirely possible I did. Regardless, this was the reason for the looping data. Problem solved there, and lesson learned.

The lesson being to always check your MIDI-OX Port Routing whenever changing MIDI Device In/Outs.
* Due to users (that's me in this particular case) inability to correctly read, comprehend, and follow directions I skipped the "erase_firmware.syx" step. I saw the following text "6. Skip this step if your MegaDrum has an old type of the bootloader, i.e. without protection from accidental firmware erasure...." and skipped it.

Once I downloaded the erase tool and ran it I could then freely update the firmware. Somewhere the directions could probably be a little more clearer for the typical idiot (again, me) but I don't have any specific suggestions at this time. It's not because I thought I had the older bootloader, I just read "skip this step" and did. Heh.
So now I'm running the latest firmware, and looking forward to the added control over the HH pedal closed/half/full triggering. Really, the HH pedal control has been my absolute FAVORITE part of MD thus far. It was always one of my least favorite parts of the Trigger IO so it's been an EXTREME joy to have the module provide so much control, and three levels of HH triggering. My acoustic conversion had using a 25k slider used to, no joke, be open lke 2" to get the full open. Now I can really compress the travel to whatever I want thanks to the controls available in MD. And of course get closed/half/full triggering in simplistic VST like Addictive Drums which uses no CC4 data against the HH.
I'll experiment with the alternative retriggering feature as well as thus far I'm unable to control the double/ghost triggering on my mesh drums with the 20090326 firmware features. Note I was never able to with the Trigger IO either without jacking Retrigger up a ton, which of course kills playability.
Thanks for the excellent support.
