You need to tune your drives, Fadals always had a problem with perfectly round holes. Roundness of about .001-.002 is normal.
This is providing your using the proper endmill for the material your cutting.
How big of a hole are you circular interpulating? what size endmil? what type of material.
does your y axis alarm out when cutting a straight line or do you have a weird finish when feeding in the y axis?
I am guessing the alarm is a seperate issue as well as your home being off.