Thanks, Stefan. I will give it a try shortly.
I went through all computers on my network that has Dropbox installed, and turned off the ‘Lan sync’ flag. Since then the ENC28J60 register values on my test OSE has been in clean state (i.e. the two bits are 0) and I no longer observe the corrupted state. So it seems at least for me, the Dropbox ‘Lan sync’ is the culprit. In fact, I have further verified it by turning Lan sync back on, and almost instantly I observe the register bits get set to 1.
I think it’s because the current UIPEthernet library has trouble dealing with a large number of broadcast requests, this results in it not able to clear register bits promptly, eventually leading to a lockup state. While we are still trying to modify the library to address this issue, the other users who experience this issue can check if you have Dropbox installed on any computer. If so, try to turn off the ‘Lan sync’ flag (in Preferences -> Network), then reboot OS so it starts in a clean state. The Lan sync feature is meant to allow computers on the same local network to sync files between each other faster, even if there is no Internet connection, so it’s ok to turn it off.