@DavidF I would get the latest Grbl (v1.1f 2017-08-01 Release) from https://github.com/gnea/grbl/releases and set your required homing Z then XY if you want to match my firmware and compile to your Nano and see if it shows the same issue.
These would be the only changes necessary:
#define HOMING_CYCLE_0 (1<<Z_AXIS)
#define HOMING_CYCLE_1 ((1<<X_AXIS)|(1<<Y_AXIS))
#define X_LIMIT_BIT 1 // Uno Digital Pin 9
#define Y_LIMIT_BIT 2 // Uno Digital Pin 10
#define Z_LIMIT_BIT 4 // Uno Digital Pin 12
I should have time to do this next week but since I'm not seeing the issue I would still have to send to you for testing and feedback.