Thanks Alex,
I have to say that I have run a PAW 'Classic' with a remote GPS mouse for over 2 years now and connectivity with this setup has proved extremely reliable. If anything, moving the GPS clear of the main unit reduces screening of the WiFi dongle so this setup should make PAW connectivity more reliable.
When you say 'GPS was lost' - do you mean you got the standard SD message 'No data has been received from your GPS device for some time, and the connection is therefore lost. Check your device settings to ensure connectivity and try again' ? AFAIK this means that there was some sort of data interruption between the two devices, but not necessarily loss of GPS itself.
Does your iPad have a 3/4G sim and what setting do you have in 'Connectivity Options' for Internet Access? In some cases, 'Live Data when Planning and Flying' can cause SD to try to connect to the internet in flight and can cause a conflict if no Internet Access is available. If in doubt, select 'Live Data when Planning'.
If this happens again, it would help greatly if you can try to get a screengrab of the PilotAware Home Screen. The 'UPTIME' Status Line, shows how long PilotAware has been running since its last start and will confirm whether Pilotaware has continued to run through the loss of connectivity (which I suspect it has) and the screengrab will also confirm your GPS status.
The other thing you could try is varying the WiFi power in the Network settings, but do so carefully and check for issues before making any other changes. A minor change to 20mW might make a difference to connectivity reliability and would be worth trying. be aware that your unit will restart to make the change take effect. I would leave the Mode and Channel as they are meantime.
Let me know how you get on
Regards
Peter