The 1394 chipset was indeed the problem. The new 1394 card with a TI chip solved the problem and there are no more sync errors.
Lessons learned:
(1) When building a new DAW. Test audio through a simple player (like windows media player) before diving right in to work with the DAW software. I could have found this earlier if I did that, there were obvious pops/clicks even with media player and 128 buffers.
(2) With 1394, check your chipset compatibility.
On the bright side, I may never have found the WiFi problem without diving into LatencyMon and could have just assumed the performance I was getting was the best this i7 could do (after clicks were solved). And, I now have a DAW that's an order of magnitude faster than my previous machine that seems to be running smooth (with little drive time so far) on Windows 8 64.
Thanks again everyone!