Bluetooth initialization fails - bt_hci_core driver open fails with error -11

We are starting to develop on a custom board running an NRF5340; when we try even something very simple like the iBeacon demo, we are unable to start bluetooth. Below are the output messages from the console:

*** Booting nRF Connect SDK v2.5.0 ***
Starting iBeacon Demo
[00:00:01.001,220] <err> bt_hci_driver: Endpoint binding failed with -11
[00:00:01.001,251] <err> bt_hci_core: HCI driver open failed (-11)
Bluetooth init failed (err -11)

I think the issue might be clock related - we dont have an external LFXO, only the high frequency Xtal on XC1 and XC2. The other code (SPI, GPIO) all seem to work.

Here is our prj.conf file if that helps:

#GPIO
CONFIG_GPIO=y
CONFIG_PINCTRL=y

#UART & SERIAL
CONFIG_SERIAL=y

#SYSTEM & CLOCK
CONFIG_SOC_HFXO_CAP_EXTERNAL=y
CONFIG_SOC_HFXO_CAP_INTERNAL=n
# CONFIG_SOC_ENABLE_LFXO=n
CONFIG_CLOCK_CONTROL_NRF_K32SRC_RC=y
CONFIG_CLOCK_CONTROL_NRF_K32SRC_RC_CALIBRATION=y
CONFIG_CLOCK_CONTROL_NRF_K32SRC_500PPM=y

CONFIG_CPP=y
CONFIG_NEWLIB_LIBC=y
CONFIG_REQUIRES_FULL_LIBCPP=y
CONFIG_STD_CPP20=y

#i2C
CONFIG_I2C=y

#spi
CONFIG_SPI=y

#flash
CONFIG_FLASH=y
CONFIG_FLASH_PAGE_LAYOUT=y
CONFIG_NVS=y
CONFIG_MPU_ALLOW_FLASH_WRITE=y
CONFIG_FILE_SYSTEM=y
CONFIG_SOC_FLASH_NRF=y

#BLE
CONFIG_BT=y
CONFIG_BT_DEVICE_NAME="XYZZY"

I can include the entire Build folder if you would like.

I am programming through VSCode, and can confirm there is _something_ in the network core.

We are using SDK 2.5 if that helps somehow.

Thank you for your time and assistance!

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