BTW, what is the ICD XASM65 assembler, noted in the comments? I don't think I've ever heard of that before. Does it have any relation to the Avocet cross-assembler products?
I don't think so. Best I know, xasm65 is just the assembler that Gustafson wrote for ICD. I seem to have source for three different versions, the last being 1.4. I just noticed that myself when I was looking over your post, which begs the question, what were they using before Mike wrote that assembler ? Anyway, it all works, the assembler and the linker. The linker will produce standard Atari binary files, although oddly it names them with a .ATR extender. I would have thought he would make it default to .COM, but perhaps they used the same linker for building ST products and wanted an easy method of distinguishing the binaries.
I suppose 3.5 could be fixed, but why bother ? It doesn't offer anything over normal SpartaDos.