Subdirectories support is almost complete, browsing the directory tree back and forth surprisingly works.
I have completed PCB design for the new prototype, and ordered a couple of boards. The design features MCU with 4K of static RAM and plenty of I/O pins, and also a 8Mx8 EDO DRAM chip. With that much of static RAM I should be able to speed up the MFM coding phase drastically.
Have a happy New Year everybody!