I've just run across a plan which has filed schedule i for the past 3 years, with beginning of year participant counts of 106, 109 and 114 respectively. There has not been an audit performed using the 120 participant count and schedule i "exemption". Any thoughts on audit implications?

I'm not sure I understand your question, but the facts you present don't necessarily present a problem. If the Plan used to have under a 100 participants, but in later years the participant count rises to 100 or more, that Plan can still file as a small plan until the participant count reaches 120. There is no limit on the number of years you can use the 80/120 rule.

see instructions for Sced I, line 4k these rules apply for plan years after 4/18/2001
check YES to claim audit waiver, but this implies
1. 95% of assets are qualifying, or amounts that aren't are bonded
2.SAR has to include language indicating blah, blah, blah about the financial institution
3. administrator must provide info to participant upon request.

that is a real brief summary, the instructions are real clear!