Hi James,
The demo project was created using IAR v8.10. You are correct about the breaking change. It looks like IAR project files went to version '3' from '2' with their switch to 8.x versions.
I intended to keep demo projects compatible with older versions, but it looks like when I made changes to the SDK.ewp's, they were automatically upgraded. I will plan to roll them all back to version '2' for the next release. To help you right now, I've attached a rolled back project file for the one you referenced above.
Let me know if you have any issues with it.
Best Regards,
Tyler