My system is finally working again, it now correctly displays the Song title and artist info for songs played over USB. All it took was completely replacing the APIM, which I had assumed was the entire MFT system, but I guess it is just a piece of it.
So if anyone has this problem, that is the solution, no software update or re-flash would fix it.
As an interesting aside, throughout this whole process or resets and re-flashes there were a few things that never got reset. The "favorites" buttons on the steering wheel never changed from my pre 3.0 settings even after all the resets. More interestingly even after the APIM was replaced the FM radio presets, and the audio setting (Bass/Treble) were still there. It seems those are cemented in memory somewhere in the car. :) Sadly the favorite buttons have now changed to the useless home and info buttons. Ill take that in exchange for a working iPod though.