The function XSysACE_SectorRead in "xsysace_compactflash.c" does not issue a CFGRESET to the device as specified in the System ACE CompactFlash Solution document (DS080) page 39. It also does not clear the reset after reading data from the device. This causes the error LED on the System ACE to light when a sector is read from the device if the device has previously been accessed via xilfatfs.
This problem is fixed in the latest 6.3 EDK Service Pack, available at:
The first service pack containing the fix is EDK 6.3 Service Pack 2.