Computing sources - script stops too many bad channels

I rectified these to Z scores

I don't this this is what you meant, but: don't rectify (absolute value) then compute a Z-score.

looked at differences which in some cases were different from the prior approach

Your first version normalizes the maps based on the projection of the noise covariance in source space.
Your second version normalizes the maps based on the averaged pre-stimulus baseline.
It is expected to observe differences between the two versions.
Both can be valid approaches. Deciding on which is the best one will depend on your hypotheses, your experimental design, your data quality, and perhaps some intuition...

Hopefully the final statistical analysis will not show much difference between the two approaches.

In case of doubts, stay as close as possible to the recommendations we give in the tutorials: