Well I was proceeding along in my game just fine and took a break before visiting the Shrine of Valor. Well I was ready to get an eighth but when I reloaded my game latter lo and behold no longer able to get partial avatarhood in Valor. So nothing changed other than saving and quiting but somehow I lost valor? Anyone else find weird things like this?

Did you save when there were monsters on the map? Maybe the game considers that cowardly for some reason.

Thinking about it I probably did. If that is the case that is extremely stupid. Half tempted to just hex edit the savegame at this point.

There is also an editor for savegames if you don't want to mess with hex code:
http://ultima3.ultimacodex.com/the-ultima-1-to-5-savegame-editor/

If you lost valor due to one mistake it shouldn't take long to get it back to maximum, you don't get completely reset, only loose a little bit for each mistake. But yes, I understand your point and in this case it wasn't even your mistake, it's a bug in the game.