I was getting a bit frustrated with the joypad reading differences between the Model 1 and Model 2 MDs. These are probably not that hard to sort out but not necessarily what I plan on tackling with the limited Z80 opcodes I can fit on a 32 macrocell CPLD. Therefore I applied a stupid simple fix, hold the Pause button on bootup to disable FM sound - seems to work just fine. The NMI is negative edge triggered (pretty sure) so it shouldn't really cause any issues. The CPLD samples the Pause button as soon as the Reset generator releases POR, so basically you can let go of the Pause button as soon as you see something on screen... 

Also, I removed the coupling caps from the audio output circuitry. I did have 47uF caps there, but viletim's comments made me realize these weren't necessary since the MD 1 & 2 already AC couple the SL1 and SR1 inputs. This has slightly improved the low-end response in the FM audio. 

There's still the issue of volume difference between Model 1 and Model 2 - this is due to Model 1's having 75ohm termination of SL1 and SR1 and Model 2's lacking this. This makes the FM audio on Model's 2 louder than the equivalent PSG (when FM is disabled). There isn't really much I can do to address that on the FMPBC sadly. My only advice is get a Model 1! Haha!