Well here's something weird. On my A1000 Phoenix board with 8732A Agnus, this demo didn't work properly. One of the options you can install in the board is the U60 PAL/GAL chip which seems to do some address line hacking so you can get 1MB chipram + 1MB slowram on a 1MB Agnus.
When I set it up like this, the demo works perfectly...
everything else is the same.
Some real black magic going on in that U60 chip
