Repeated self modification is problematic, because it represents a product of series (though possibly a convergent one, if the AI gets better at maintaining its utility function / rationality with each modification) -- naively, because no projection about the future can have a confidence of 1, there is some chance that each change to the AI will be negative-value.
Right, it's not only noise that can alter the value of copying/propagating source code, since we can at least imagine that future improvements will be also more stable in this regard: there's also the possibility that the moral landscape of an AI could be fractal, so that even a small modification might turn friendliness into unfriendliness/hostility.
One of the more interesting papers at this year's AGI-12 conference was Finton Costello's Noisy Reasoners. I think it will be of interest to Less Wrong: