Very, very interesting story IO. Thanks for publishing it.
To me it's a mystery how electronics of that era ever worked at all, considering the pathetic tolerances of the individual components and the appalling reliability of same. If a modern PC were built with the same underlying material it would execute about 50 instructions before crashing. Indeed, in the 80's, Hawker Siddley believed exactly that and arranged for the CPU in a certain missile to be hard reset on every 500 rpm rotation of the vehicle!
Problem is, today we have unveriafiable software to fill the same evolutionary niche that once belonged to ghastly analogue and RTL electronics. Who can say that a GPS might not go off on a 'valid flag' adventure of it's own under the right circumstances? There's been no shortage of 'Innacurate GPS' anecdotes on here over the years and I bet none of those have been followed up with the agressive technical persistence that you've shown in this case. We'd need a technically literate CAA or AAIB for that.
I'm not quibbling with your underlying message, IO, that GPS (panel mount, IFR cert) is far, far more reliable that all this VOR/DME/ADF/ILS etc cluge up of antique electronics that should occupy airport dustbins. There it could be accompanied by the crushed and stripped remains of all the 30 year old spamcans that UK plc forces us to keep in the air, and which should be replaced with new aircraft and avionics, were it not for suffocating 'safety' bureaucracy and the lack of commercial finance for small businesses, which should allow owners to trade off finance costs against decent utilisation and the destruction of outlandish maintenance costs.
My own (strictly VFR) solution (in a 30 yr old spamcan equivalent of a Cortina mk1) is to monitor the 430 with the output of VOR, DME, even ADF and make sure it fits on the (printed) map. But if one day they don't agree, (It actually happened routing to one of those very narrow corridors at the Canyon), guess which one I'll believe! And because I believe the (cross checked) GPS, I'll live.
PS if you have a spare moment to have a look at some of the perplexing avionics issues in my aerial Cortina, I'd love the help. It's got my £40/Hr engineers beat and every time I thunp the table it's another £40 times xs hours to not fix the problems that were probably designed in by the original equipment manufacturers in the first place.