again, sorry for asking simple questions, but it does help eliminate the obvious!

This also happens if cutting a square? Have you tried typing manual gcode into the MDI window? Something like (assuming you are starting at (0,0)):
F100
g1x100
G1y100
G1x0

That's about as simple as it gets and you have control over reversals of direction - circles have a lot more in them so less clear exactly what is happening.
G1y0