My question if anyone can help is:

1)Do I need to file a 5330 for the employer over the late deposit issue? It seems everything I have read says untimely deposits are prohibited transactions and a 15% excise tax should be paid on the full amount of late deposits.

2)Can this be self corrected by depositing lost earnings for all affected participants? If so would that wave the excise tax from being paid?

You need to read both Rev Proc 2003-44 and the DOL Voluntary compliance program to determine the interest amount, proper amount on 5330, and how to avoid filing the 5330.

1) yes, but it's on the lost earnings, not the full amount of the deposit. A BIG difference. Earnings is essentially determined based on the greater of the underpayment of taxes rate in 6621(a) (published quarterly) or the best performing fund (assuming you don't want to calc. earnings separately for each participant).

2) The excise will not be waived.

Although I'm sure the IRS wouldn't be too happy about this is far and away a DOL issue, and it should be corrected as described in the DOL's VFCP, and not the IRS correction program.