I just wanted to close this out with a good word. I did an online chat with pre sales and they had me send the logs from our eval unit. The sales person forwarded the logs to an engineer who sent an email within an hour. The tech said it looked like my Qlogic card was bad based on some log entries. He was spot on. We changed the FC card and all is great. We now have turned in an old HP DL320s G1 into viable FC backup solution.
Thanks for the reply and especially the good comments as our guys really try hard to be the best and they get very little recognition - many thanks again!