I think I have my problem solved. I removed and re-added the partnership. Then I created a new outgoing port on com8, and an incoming port on com7. I then went into the GPS applet and set both hardware and program port to "none", and uncheck the "let windows manage gps device automatically". Now I seem to be able to connect to the gps consistently, though knock on wood I only tried it 3 times.
You can find the official instructions for pairing with WM5 PPC are here:
http://www.usglobalsat.com/forum/topic.asp?TOPIC_ID=28
But I didn't follow that exactly, since I changed to com port 8 and disabled windows gps management.