I've got the PhlatPrinter 3 working properly again! The driver board cannot handle the 2.5A stepper motor I tried, and this blew the channel. And there seems to be a bug in the plugin that generates the G-code -- when I used tabs (to hold the cut pieces in place in the sheet) and 2 depth passes, the g-code was messed up. When I do not use tabs, all is well.
Woohoo!
I even got it to cut through all but 1/16" and I know that I need a longer cutting bit that has a little more than 2" of cutting edge, and the gantry needs a modification to get a little more height range, so the longer bit doesn't skim the top surface.