Re plugin location: not sure what the problem is exactly but would like to replicate and fix it if possible, as I thought I had put everything correct for the new user plugins folder in 1.2.8! It worked on my test install following the instructions I wrote, but I may have done something to fix it subconciously without realising!
Re source update: very happy to merge your changes in, unfortunately because of the way my web host does subversion hosting, I only have one login for it so can't share that, however if you'd like to drop me a patch/instructions/updated sources, I'll happily merge them in on your behalf, test it out, and assuming all works, merge it into the trunk for a new release.
Mark