E125 heading display stability

[jgonnerman]

I have an e125mfd with an st 8002 control head and a smartpilot.
The smartpilot communicates with the MFD via an NG converter.
When at crusing speed 8-10 knots and lower the heading readout on the MFD is highly erratic varying both left and right 60-90 degrees. This occurs in all steering modes. Standby,auto and tracking. The heading reading does not vary on the control head and the auto pilot does not seem to respond to the mfd heading change.
The NG converter also is fed by the Raymarine GPS and st60 depth sounder and these read outs remain stable which would likely indicate the converter is working.
The heading deviation will last 0 to 3 seconds and then return to the correct reading.
The flux gate has been swung and COG and heading aligned.
The only reading the erratic heading shows on is the MFD.
When the heading jumps the radar set on heads up shows bad info momentarily until it restores to the correct heading value.
If the chart and radar pages are set to course up only the digital heading value and vector jump but I don't always want to enter a waypoint close to my desired direction as a workaround.
Is this possibly a cabling/connection issue or a MFD software problem?