The main different in between paged and unpaged is for the S12, is the data shared in between the cores?
Also how does it fail, does any code get executed for the XGATE at all?
How is the code for the XGATE mapped, flash?
Is the XGATE stack properly initialized?
I did not notice anything special from the provided information, I would think we need more hints on what is going on. With a bdm it should not be too hard to see what fails.
Daniel