Make sure you burn the flash image for U-Boot at the very start of flash (no matter where that is). If you program it with the jumper in the default position, start programming at 0xff800000. This will place the image correctly. (New HRCW _must_ be at very start of memory)

I should have said, the latest u-boot-0.4.x. I did a cvs checkout last night which shows me the LABEL_2003_09_13_2100 for mpc8266ads.c. And I confirmed that mpc8266ads.c does indeed have the PBI turned off.

Will verify latest later today.