Keith,
you said : If however the problem is one of a sudden loss of fan/compressor efficiency, due to FOD for example, then an EPR system will be far more effective than an N1 system as an indication of thrust.
I have to disagree a little bit with you one this. On a PW JT9D-59A powered A300 a few years ago, I wittnessed a birdstrike which remodelled the fan stage quiet drasitically, however the core airflow was not disturbed and therefor the EPR remainded the same, the a/c yawed very dramatically befored the crew recovered.
It is true that if you measure the fan outlet pressure, then the EPR indication is as close to an actual measurement of thrust as you can get on wing, but I only know of a couple of engines that measures that (CFM56-5 and 7) and on those it is only used for engine health monitoring.
Brgds
Doc