Regarding problems I think I read RAM timing problems but I cannot say more about it because not being involved there. In any case the problems obviously were so relevant that the whole project stalled.
Not really RAM timing, but the problem was to pipeline the blitter *and* stay compatible with the original. The current FPGA implementation does not really use the full power of the FPGA for blitter emulation, it is more a step-by-step implementation. It could be made much faster by bundling the RAM accesses and fetch several words at once, similar to bursting (as far as I understand it).
The problem is that this also limits compatibility. With the original blitter, you can in principle configure your output register (channel D) such that it writes "in front of" the input registers (A,B,C), i.e. the input channels can see what the output writes, *if* you know the exact timing of the blitter, and which channel allocates which DMA time slot.
With any type of pipelining in place, this type of "trick" no longer works. The input registers would have their input already buffered since a long time before the buffered output ever appears on the bus, and hence blitter functionality would then be different.
As always "no sane programmer" would have done that, but a lot of insane programming (called "hacking") was done on the Amiga... So it was again a problem of finding the right balance between speed and compatibility. With blitter prefetching active, probably a handful of "programs" (as in demos) would not run anymore correctly, but this would again cause an outcry of those who love that stuff...
Thus, one of the big problems here is really of finding the "sweet spot" between compatibility and speed. All Os4 and friends/foes cut compatibility at "source code level" (as in "you have to recompile"). This would be ok for an open source platform, but Amiga was none. Natami tried at "hardware register level", but maybe that's already asking a bit too much, and probably the cause for its failure.
Having a blitter is probably a "must have", but do we really need to emulate every nonsense that was done back then in the early days? *That* is the big question.