diff --git a/apps/api/Dockerfile b/apps/api/Dockerfile
index b2d0cc5..fdbfe39 100644
--- a/apps/api/Dockerfile
+++ b/apps/api/Dockerfile
@@ -50,8 +50,8 @@ ENV PATH=/root/.local/bin:$PATH
 # Copy application code
 COPY --chown=appuser:appgroup . .
 
-# Create directories for repo and instance storage
-RUN mkdir -p /data/repos /data/instances && chown -R appuser:appgroup /data
+# Create directories for repo, instance, and workspace storage
+RUN mkdir -p /data/repos /data/instances /data/working-copies && chown -R appuser:appgroup /data
 
 # Copy wait-for-db script
 COPY wait-for-db.sh /usr/local/bin/wait-for-db.sh
diff --git a/apps/api/src/services/manifest_compiler.py b/apps/api/src/services/manifest_compiler.py
index 11f18a8..a971268 100644
--- a/apps/api/src/services/manifest_compiler.py
+++ b/apps/api/src/services/manifest_compiler.py
@@ -26,7 +26,7 @@ def resolve_base(manifest: dict) -> dict:
     result = deepcopy(manifest)
 
     base_definition_id = result.pop("base_definition_id", None)
-    base_version = result.pop("base_version", "latest")
+    result.pop("base_version", None)
 
     if base_definition_id:
         # This will be provided by the caller (they have the DB session)
@@ -167,8 +167,11 @@ def compile_dockerfile(manifest: dict) -> str:
         lines.append(f"ENV HOME={home}")
         lines.append(f"ENV USER={name}")
         lines.append("")
+        # Ensure home directory exists and is writable by the user
+        lines.append(f"RUN mkdir -p {home} && chown {name}:{name} {home} && chmod 755 {home}")
+        lines.append("")
 
-    # Build scripts
+        # Build scripts
     build_scripts = manifest.get("scripts", {}).get("build", [])
     for script in build_scripts:
         # Normalize multi-line scripts into single RUN command
diff --git a/apps/api/src/services/workspace_manager.py b/apps/api/src/services/workspace_manager.py
index a37c703..ba1fb37 100644
--- a/apps/api/src/services/workspace_manager.py
+++ b/apps/api/src/services/workspace_manager.py
@@ -73,7 +73,13 @@ class WorkspaceManager:
             RuntimeError: If git clone fails.
         """
         path = self._workspace_path(repo.id, name)
-        os.makedirs(os.path.dirname(path), exist_ok=True)
+        parent = os.path.dirname(path)
+        os.makedirs(parent, exist_ok=True)
+        # Ensure container users (various UIDs) can write to workspace dirs
+        try:
+            os.chmod(parent, 0o777)
+        except OSError:
+            pass
 
         logger.info(
             "Creating workspace: name=%s, repo=%s, branch=%s", name, repo.id, branch
@@ -99,6 +105,23 @@ class WorkspaceManager:
 
         await GitService.clone(repo.remote_url, branch, path, ssh_key=ssh_key)
 
+        # Make workspace writable for any container user
+        try:
+            os.chmod(path, 0o777)
+            for root, dirs, files in os.walk(path):
+                for d in dirs:
+                    try:
+                        os.chmod(os.path.join(root, d), 0o777)
+                    except OSError:
+                        pass
+                for f in files:
+                    try:
+                        os.chmod(os.path.join(root, f), 0o666)
+                    except OSError:
+                        pass
+        except OSError:
+            logger.warning("Failed to chmod workspace path: %s", path)
+
         workspace = Workspace(
             name=name,
             repo_id=repo.id,
@@ -190,6 +213,24 @@ class WorkspaceManager:
             return SyncResult(branch_deleted=True)
 
         await GitService.pull(workspace.path, workspace.branch, ssh_key=ssh_key)
+
+        # Re-apply permissive permissions after sync
+        try:
+            os.chmod(workspace.path, 0o777)
+            for root, dirs, files in os.walk(workspace.path):
+                for d in dirs:
+                    try:
+                        os.chmod(os.path.join(root, d), 0o777)
+                    except OSError:
+                        pass
+                for f in files:
+                    try:
+                        os.chmod(os.path.join(root, f), 0o666)
+                    except OSError:
+                        pass
+        except OSError:
+            logger.warning("Failed to chmod workspace after sync: %s", workspace.path)
+
         workspace.last_sync_at = datetime.now()
         logger.info("Workspace synced: %s", workspace.id)
         return SyncResult(branch_deleted=False)
diff --git a/apps/web/src/components/start-tool-fab.tsx b/apps/web/src/components/start-tool-fab.tsx
index 4741fb7..36e0bcc 100644
--- a/apps/web/src/components/start-tool-fab.tsx
+++ b/apps/web/src/components/start-tool-fab.tsx
@@ -71,16 +71,12 @@ export function StartToolFAB() {
 							</p>
 						) : !selectedWorkspace ? (
 							<div className="form-group">
-								<label htmlFor="fab-workspace-select">
-									Select a workspace
-								</label>
+								<label htmlFor="fab-workspace-select">Select a workspace</label>
 								<select
 									id="fab-workspace-select"
 									value=""
 									onChange={(e) => {
-										const ws = workspaces.find(
-											(w) => w.id === e.target.value,
-										);
+										const ws = workspaces.find((w) => w.id === e.target.value);
 										if (ws) setSelectedWorkspace(ws);
 									}}
 								>
@@ -97,8 +93,7 @@ export function StartToolFAB() {
 								<div className="tool-starter-header">
 									<h4>
 										{selectedWorkspace.project_name} /{" "}
-										{selectedWorkspace.repo_name} /{" "}
-										{selectedWorkspace.name}
+										{selectedWorkspace.repo_name} / {selectedWorkspace.name}
 									</h4>
 									<button
 										className="ghost-button small"
diff --git a/apps/web/src/components/terminal.tsx b/apps/web/src/components/terminal.tsx
index b74d087..06a3d47 100644
--- a/apps/web/src/components/terminal.tsx
+++ b/apps/web/src/components/terminal.tsx
@@ -285,6 +285,8 @@ export const TerminalComponent = React.forwardRef<TerminalRef, TerminalProps>(
 			const container = terminalRef.current;
 
 			// Define fitTerminal before connectWebSocket so it's available in onmessage
+			let lastSentCols = 0;
+			let lastSentRows = 0;
 			const fitTerminal = () => {
 				if (!fitAddonRef.current || !termRef.current) return;
 				try {
@@ -294,23 +296,35 @@ export const TerminalComponent = React.forwardRef<TerminalRef, TerminalProps>(
 					return;
 				}
 				const { cols, rows } = termRef.current;
-				// Force refresh if dimensions are valid
-				if (cols > 0 && rows > 0) {
-					try {
-						termRef.current.refresh(0, rows - 1);
-					} catch {
-						// Ignore refresh errors
+				// Only send resize when dimensions actually changed
+				if (
+					cols > 0 &&
+					rows > 0 &&
+					(cols !== lastSentCols || rows !== lastSentRows)
+				) {
+					lastSentCols = cols;
+					lastSentRows = rows;
+					const currentWs = wsRef.current;
+					if (currentWs?.readyState === WebSocket.OPEN) {
+						currentWs.send(JSON.stringify({ type: "resize", cols, rows }));
 					}
 				}
-				const currentWs = wsRef.current;
-				if (currentWs?.readyState === WebSocket.OPEN && cols > 0 && rows > 0) {
-					currentWs.send(JSON.stringify({ type: "resize", cols, rows }));
-				}
 			};
 
 			// Open xterm first (must happen before fit)
 			term.open(container);
 			term.focus();
+
+			// Allow ESC to propagate to browser when not in alternate buffer (vim/tmux)
+			term.attachCustomKeyEventHandler((e) => {
+				if (e.key === "Escape") {
+					const isAlternate =
+						term.buffer.active.type === "alternate";
+					return isAlternate; // true = xterm handles it, false = browser handles it
+				}
+				return true;
+			});
+
 			const ws = connectWebSocket();
 
 			// Mobile touch scroll.
diff --git a/apps/web/src/pages/dashboard.tsx b/apps/web/src/pages/dashboard.tsx
index aafee58..35305e7 100644
--- a/apps/web/src/pages/dashboard.tsx
+++ b/apps/web/src/pages/dashboard.tsx
@@ -8,10 +8,7 @@ import {
 	type Session as SessionApi,
 	type InstanceHealth,
 } from "../api/sessions";
-import {
-	ErrorState,
-	LoadingState,
-} from "../components/data-states";
+import { ErrorState, LoadingState } from "../components/data-states";
 import { SessionList } from "../components/session-list";
 import { useInstanceActions } from "../hooks/use-instance-actions";
 
diff --git a/apps/web/src/pages/sessions.tsx b/apps/web/src/pages/sessions.tsx
index 2442249..bca9805 100644
--- a/apps/web/src/pages/sessions.tsx
+++ b/apps/web/src/pages/sessions.tsx
@@ -163,8 +163,8 @@ export const SessionsPage = () => {
 								<h3>Uncommitted Changes</h3>
 								<p>
 									The repository{" "}
-									<strong>{dirtyDeleteSession.repository_name}</strong>{" "}
-									has uncommitted changes. Deleting this session will permanently
+									<strong>{dirtyDeleteSession.repository_name}</strong> has
+									uncommitted changes. Deleting this session will permanently
 									lose these changes.
 								</p>
 								<div className="changed-files-list">
diff --git a/apps/web/src/styles.css b/apps/web/src/styles.css
index 1f9171f..a41a2b7 100644
--- a/apps/web/src/styles.css
+++ b/apps/web/src/styles.css
@@ -5633,7 +5633,9 @@ a:active,
 	display: flex;
 	align-items: center;
 	justify-content: center;
-	transition: transform 0.15s ease, box-shadow 0.15s ease;
+	transition:
+		transform 0.15s ease,
+		box-shadow 0.15s ease;
 }
 
 .start-tool-fab:hover {
diff --git a/docker-compose.yml b/docker-compose.yml
index 62f963d..dd813ba 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -63,6 +63,7 @@ services:
     volumes:
       - /data/repos:/data/repos
       - /data/instances:/data/instances
+      - /data/working-copies:/data/working-copies
     ports:
       - "8000:8000"
     depends_on: