>The main application object, which launched the form (which is not modal) has a READ EVENTS.
>
>The Timer event first sets
>THIS.Interval = 0
>
>then, to shut down, it sets
>THIS.enabled = .F.
>RELEASE THISFORMSET
>CLEAR EVENTS

I see one suspicious place: this.interval=0. It will fire Timer event indefinitely and really can cause GPF. What is the reason to use this setting?
Another question: where you put READ EVENTS? In my applications Ithe first module is prg file with READ EVENTS and first formset starting before this command. When user press Exit button in the formset he fires App.QuitApp() method of system object which 1) release formset 2)clear events. It looks like consistent quitting, else you first release formset and then issue command CLEAR EVENTS from snippet of the released object.