I think the board crash is a thermal related issue -- after leaving the board off for a period of time, ~15min. It booted and successfully completely apt-get update.
After leaving it alone for some time, the same thing happened and I checked the temp and it seemed pretty warm. I have the heatsink on but no fan running over it. It seems the new image uses more power for perhaps more performance and more thermal output?
At least that solves one problem.
I'm still unsure why no USB devices are detected -- has to be related to software/drivers in the Parabuntu image.. any ideas?