Yes I have tried a number of things, including the EPUBTest file (
http://epubtest.org/rs/47/). It is interesting that while this page reports that font embedding does, as you say, work for 1.0.00.07030, it did not work for my device with 1.1.01.17210.
Can you factory reset a PRS-T3 back to 1.0.00.07030?