This update appears to have fixed the alpha and blend issues with the particles and I can now use the ccbUpdateTerrain function. The FPS Camera bobbing and swaying also works now!
However, I still have an issue with grass disappearing when using the following functions:
ccbSetTerrainTexHeight(terrainnode, 0.20, 0.40);
ccbSetTerrainTexAngle(terrainnode, 30, 60);
Thanks for the updates!