Ok, so last week I bought a refurbished BD-C5500 from Factory Direct in Hamilton, Ontario, based on what I had read on this thread. Despite some obvious complaints other owners have, I thought this player would be the perfect match for my large x264 MKV collection, and hard to go too wrong for only $100 CDN. It arrived with fairly recent firmware, and out of the box it played most of the MKV files I threw at it. Then, with some trepidation caused by the experiences of others on this thread, I upgraded to what was then the latest release, 1018.0. I couldn't get it to do an internet install, so I copied the RUF file to a CD-RW and upgraded the firmware from the loader.
As I feared, MKV support was severely impacted by the upgrade. After the upgrade the player would start to load the MKV files, but the timer display would stay stuck at 0:00 for maybe 20 or 30 seconds, before the player told me the file was an unsupported format. Only about one in ten of my MKV files would play with the new firmware, and many that played fine under the firmware that came with the unit suddenly became unplayable. Upgrading to 1019.0 didn't help. I knew for a fact that the video and audio formats in the MKV were supported formats on the C5500, so I started to wonder if the MKV container was somehow to blame. Most of my MKVs have been muxed with MkvToolnix MkvMerge, and all play perfectly on any PC I've tried them on. On a long shot, I remuxed them using AviMuxGui, which also supports writing to MKV files. Imagine my surprise when EVERY movie I remuxed this way suddenly played perfectly on my BD-C5500, even with the updated firmware. MkvMerge is the de facto standard for multiplexing MKV files, but the BD-C5500 doesn't seem to be able to read the containers it creates properly. Hopefully a later firmware release with address this. I haven't found any other practical MKV muxers to test, but I can state categorically that AviMuxGUI will produce acceptable MKV files for this player if the video and audio use supported codecs.
I know some others here are having trouble with this player choking on some of their media files, and I thought I'd pass this along in the hope that it helps others.