Copter 3.5rc8 Loiter throttle surging/oscillation

I tried a flight with 3.5rc8 on my PixRacer 210 quad and while it seems to fly normally in Stabilize in Loiter and PosHold it has this rapid vertical surging/oscillation that is clearly seen in RCOUT (and Z-axis accel). This quad flew well in Rc7 and previous beta rev’s
210 quad

This was caused by the change in INS_ACCEL_FILTER from 20 to 10 in Rc8. Quite surprising but I can change it back and forth from 20 to 10 and replicate the problem. The only unique thing about this quad is the PixRacer FC mount is very compliant.