Thanks Mono,
Yeah, I have tried a variety of PDFs and this problem has occured in all of them. You make a good point that it is unlikely the same thing causing annotation problems in reflow and in landscape. Perhaps there are two different bugs? In the old PDF reader I am able to make annotations in landscape mode with cropped margins and they merged into a new PDF with no problem.
Using scribbles definitely seems the right way to go, at least until the next firmware update
I have used scribbles on scanned books without OCR'ed text and they work without a problem!
Thanks again for your help!