Ugh. It's not a GAPI bug! This is entirely Compaq's boneheaded move in their display driver.
The screen on the 38xx series of devices is oriented differently from the previous iPaqs. Rather than expose this new orientation through GAPI, they used a feature of GAPI called "gxdma" to expose an intermediate buffer to applications that is oriented the same as previous iPaqs. This intermediate buffer is copied to actual display memory each frame when your app calls GXEndDraw. This extra full-screen copy operation is causing the performance hit you're experiencing.
This was done for compatibility reasons because some popular games didn't test the GAPI caps bits and just assumed that if they were running on a iPaq the screen layout/config was the same. Rather than having these existing games not run on the new iPaqs, they decided to take the perf hit in the name of compatibility.
The good news is that if you want to write your app to the actual video memory address and not pay the perf hit, you can read this thread for how to do it.