PLEASE HELP;
After a few hard hours of testing, a conclusion is made:
1. The QG8 datasheet is not correct for the IIC module
2. The mcu on the QG8 demo board has a problem
Despite this, I figured a soluton to the IICS_BUSY flag not clearing.
Between successive bus transfers, I added this to reset the IIC bus:
IICC_IICEN = 0;
IICC_IICEN = 1;
Now all my code works as expected. But this was a frustrating and troublesome problem to resolve especially with no scope to see the IIC bus activity.