No I didn't get any insight into the main reason for the purge policy failure. I just got a generic response that implied "many settings needed to be tweaked". The irony is that all my previous settings were blown away when I upgraded to the latest version. Lesson learned is to use the "download settings" option before upgrading.
I also thought there was some relationship between the Maximum Lifetime and the problems I was seeing. But I wasn't so sure after I started seeing purge issues last up to 20 minutes or longer.
As far as your question about setting the Maximum Lifetime to a lower amount, I can only guess that you can experiment with it. And as long as you aren't hosting a high-performance site it shouldn't affect page load times.
I'm still mystified as to what some of these settings do and how the different settings affect each other.
On a final note, I had another forum posting asking about how to test these settings without creating false blog posts. I never got an answer on that post either. These seem like fundamental issues that some with significant Wordpress admin experience could answer.