After some more discussion offline on dlmgmtd (datalink-management service) and testing a fix it appears the root filesystem need not be read-write when we run the 'dladm' commands to do the update in net-physical and net-nwam. So option (1) is going to work after all.
We will modify net-physical and net-nwam services to check datalink.conf and issue the necessary dladm commands. Thanks to all for the feedback and the discussion on this update to work with IPS. Rishi
