I had a couple of emails from 'Oliver de Font' who has several STE's all of which suffer from DMA issues with ultrasatan. He did as I suggested previously in changing the CPU and he reported back it solved his DMA issues. He since emailed me saying the same fix also worked on another STE. His STE's all have the -38 DMA.
So why does the CPU "fix" DMA issues ? Well like I said from the start, noise on the bus. In fact after investigation the problems mostly seem to be generated from near the CPU. Poor grounding on the CPU is causing huge voltage spikes near the DMA IC. Such spikes can latch up logic internally in the DMA and that is likely what happens.
Changing the CPU to a HC type pushes less current though the ground connections on the motherboard and the voltage "bounce" gets greatly reduced. Once this problem is reduced, the DMA no longer "sees" these screwy voltages and it behaves perfectly.