Launching Application into Background fails on iOS

Hopefully someone from Adobe will drop by, but in the meantime I have questions.

What tool was used to create the sample app? I wouldn't know where to being in testing the app.

Have you tried local notifications? That has the same needs, in that iOS launches it in the background and then calls the app to let it know about a user touch. Those work ok, so I would have thought that location services would work.

In your function that handles the location call from iOS, does the function get reached? You could do a trace while in debug via USB to see if it gets there.

If it does reach the function, are you doing anything that involves drawing graphics? Trying to use Stage3D while the app is in the background could lead to the error you're seeing.