Yes quite possible a bad 81C55, M15 or keyboard would cause an issue. Try putting in one of the RAM modules see if that helps. Unfortunately the 81C55 also controls the LCD.
I should try and see if it is actually reading the ctrl-brk, what if there is a problem with the keyboard or key decoding? Looking at the source it looks like it will trigger a cold boot when it senses a change in memory size or a new option ROM being installed to.
