Well, I'm sad to report that firmware 1.06 is still causing me the same difficulties.
I upgraded to 1.06 and saw that the latest Easy Search utility 4.4 has an updated BT binary, so I thought I'd update that too.
Unfortunately, when I did so, I get the same issues as before, with the Volume_1 and Volume_2 confusion, unable to connect to server messages, etc.
Tonight when I get home I'll have to again step through Banshee1971's step by step to regain BT functionality.
Was our DNS323 built backwards or something?