Thanks for the reply Frank.
There-in lies another problem. My inventory is partially hosed with no hosts or vm's showing up (datastores and higher level objects are) and the web client is now acting up (not an unusual occurrence there!). We fully reset the inventory database as part of the troubleshooting.
I did set vflash to FALSE in the vmx file for the appliance and rebooted. Still seeing elevated CPU/Mem for the appliance.
The really "interesting" part is, I can't use the vcenter FAT client to edit settings on a VM with hardware version = 10 which is what my vc appliance is at now. I know of no way to connect the web client directly to an ESXi host, do you? Seems a bit painted into a corner.