I've had a couple of terrain warnings go off at altitude recently too (since upgrading to 720). However, I noticed that the GPS altitude displayed was incorrect at that point too (fixed its self shortly thereafter).
So I think at least in my case that it may not have been an iFly software logic issue but rather the GPS engine (reporting wrong altitiude to the software for a moment) that caused this for me (explains insane VST also).
Is it possible as I've experienced, you had a weak GPS signal too, possibly giving a bogus gps altitiude that the software was simply reacting to? Or was your GPS altitide indicating correctly (pointing to software logic issue)?
- Alasdair