Pixhawk failsafe: no local position

I am trying to build a small drone for use indoors that will not use GPS or Compass. I want to use Position flight mode. The hardware is a Pixhawk 1, Hobbypower I2C PX4Flow with rangefinder. Running the most current stable version 1.92. Eventually the sonar will be replaced by a LidarLite v3.

In QGC analyzer I believe the PX4Flow data to be proper and reacting normally. The drone flies very good indoors and outdoors in AltHold and is well tuned. When attempting flight mode Position, the craft seems to lock and hold for 5+ seconds then goes to “failsafe: no local position”.

This is my first attempt at PX4 and Flow non-GPS positioning. Any guidance would be appreciated. As much time as I have put trying to make corrections, I imagine there is something simple I am overlooking or just don’t know.

Thanks in advance - Howard.

Here is a clean log from a short test flight.