Hi Dave,
The project you are using, pwm_led, was built in Processor Expert using the default flash configuration setup. This setup
sets the FSEC field (memory location 0x0000_040C) to the following state:
Backdoor Key Security: Disabled.
Mass Erase Enable: Enabled
FSL Failure Analysis Access: Enabled
Flash Security: Unsecured
Specifically, it sets all of these 2-bit fields to 0b11 except for the Flash Security field, which it sets to 0b10, and the KEYEN field, which it sets to 0b01, the preferred KEYEN state to disable backdoor key access. IAR's default function is to program the part with the specified output file, and then check the Flash configuration fields. If they are not written to the factory default state, it will write them to the factory default state unless your *.board file includes the extra parameter "--enable_config_write" (which none of the sample code projects do). Therefore, what is programmed on the part, is not exactly what IAR was told to program. This is why there is a target inconsistency at that address.
As for your other suggestions, thank you. We are currently trying to address these concerns.
Hope this helps,
Chris