diff --git a/src/resources/extensions/gsd/dispatch-guard.ts b/src/resources/extensions/gsd/dispatch-guard.ts
index 811ff4cf7..59df30db1 100644
--- a/src/resources/extensions/gsd/dispatch-guard.ts
+++ b/src/resources/extensions/gsd/dispatch-guard.ts
@@ -26,9 +26,20 @@ export function getPriorSliceCompletionBlocker(
   const { milestone: targetMid, slice: targetSid } = parseUnitId(unitId);
   if (!targetMid || !targetSid) return null;
 
+  // Parallel worker isolation: when GSD_MILESTONE_LOCK is set, this worker
+  // is scoped to a single milestone. Skip the cross-milestone dependency
+  // check — other milestones are being handled by their own workers.
+  // Without this, the dispatch guard sees incomplete slices in M010/M011
+  // (cloned into the worktree DB) and blocks M012 from ever starting. #2797
+  const milestoneLock = process.env.GSD_MILESTONE_LOCK;
+
   // Use findMilestoneIds to respect custom queue order.
   // Only check milestones that come BEFORE the target in queue order.
-  const allIds = findMilestoneIds(base);
+  // When locked to a specific milestone, only check that milestone's
+  // intra-slice dependencies — skip all cross-milestone checks.
+  const allIds = milestoneLock && targetMid === milestoneLock
+    ? [targetMid]
+    : findMilestoneIds(base);
   const targetIdx = allIds.indexOf(targetMid);
   if (targetIdx < 0) return null;
   const milestoneIds = allIds.slice(0, targetIdx + 1);
diff --git a/src/resources/extensions/gsd/parallel-orchestrator.ts b/src/resources/extensions/gsd/parallel-orchestrator.ts
index ff2ce775b..95b87d738 100644
--- a/src/resources/extensions/gsd/parallel-orchestrator.ts
+++ b/src/resources/extensions/gsd/parallel-orchestrator.ts
@@ -519,8 +519,19 @@ function createMilestoneWorktree(basePath: string, milestoneId: string): string
 
 /**
  * Spawn a worker process for a milestone.
- * The worker runs `gsd --print "/gsd auto"` in the milestone's worktree
+ * The worker runs `gsd headless --json auto` in the milestone's worktree
  * with GSD_MILESTONE_LOCK set to isolate state derivation.
+ *
+ * IMPORTANT: We use `headless --json auto` instead of `--print "/gsd auto"`.
+ * --print mode calls session.prompt() which returns immediately after the
+ * extension command handler fires, because auto-mode's ctx.newSession()
+ * resets the session and unblocks the outer prompt() await. This causes
+ * process.exit(0) to fire before any LLM work happens. See #2792.
+ *
+ * The headless subcommand uses an RPC client that keeps the process alive
+ * until auto-mode emits a terminal notification or the idle timer fires.
+ * It outputs NDJSON events to stdout (with --json), which our
+ * processWorkerLine() parser already understands.
  */
 export function spawnWorker(
   basePath: string,
@@ -537,7 +548,7 @@ export function spawnWorker(
 
   let child: ChildProcess;
   try {
-    child = spawn(process.execPath, [binPath, "--mode", "json", "--print", "/gsd auto"], {
+    child = spawn(process.execPath, [binPath, "headless", "--json", "auto"], {
       cwd: worker.worktreePath,
       env: {
         ...process.env,
@@ -577,9 +588,10 @@ export function spawnWorker(
   }
 
   // ── NDJSON stdout monitoring ────────────────────────────────────────
-  // Workers run with --mode json, emitting one JSON event per line.
-  // We parse message_end events to extract cost/token usage, keeping
-  // the coordinator's cost tracking in sync with actual API spend.
+  // Workers run via `headless --json`, which forwards all RPC events
+  // as NDJSON to stdout. We parse message_end events to extract
+  // cost/token usage, keeping the coordinator's cost tracking in sync
+  // with actual API spend.
   if (child.stdout) {
     let stdoutBuffer = "";
     child.stdout.on("data", (data: Buffer) => {
@@ -808,7 +820,12 @@ export async function stopParallel(
       } catch { /* process may already be dead */ }
     }
 
-    const exitedAfterTerm = await waitForWorkerExit(worker, 750);
+    // Wait for the headless process to cascade SIGTERM to its RPC child.
+    // The headless signal handler calls client.stop() which sends SIGTERM
+    // to the RPC child and waits up to 1000ms. The previous 750ms window
+    // was insufficient — the parent got SIGKILL before the child died,
+    // leaving orphaned RPC processes holding auto.lock. See #2798.
+    const exitedAfterTerm = await waitForWorkerExit(worker, 3000);
     if (!exitedAfterTerm && worker.pid > 0) {
       try {
         if (worker.process) {
diff --git a/src/resources/extensions/gsd/tests/dispatch-guard.test.ts b/src/resources/extensions/gsd/tests/dispatch-guard.test.ts
index 39900caaa..1989a0195 100644
--- a/src/resources/extensions/gsd/tests/dispatch-guard.test.ts
+++ b/src/resources/extensions/gsd/tests/dispatch-guard.test.ts
@@ -216,3 +216,50 @@ test("dispatch guard works without git repo", (t) => {
 
   assert.equal(getPriorSliceCompletionBlocker(repo, "main", "plan-slice", "M001/S02"), null);
 });
+
+test("dispatch guard skips cross-milestone check when GSD_MILESTONE_LOCK is set (#2797)", (t) => {
+  const repo = setupRepo();
+  t.after(() => {
+    delete process.env.GSD_MILESTONE_LOCK;
+    teardownRepo(repo);
+  });
+
+  mkdirSync(join(repo, ".gsd", "milestones", "M010"), { recursive: true });
+  mkdirSync(join(repo, ".gsd", "milestones", "M011"), { recursive: true });
+  mkdirSync(join(repo, ".gsd", "milestones", "M012"), { recursive: true });
+
+  // M010 and M011 have incomplete slices
+  insertMilestone({ id: "M010", title: "Analytics" });
+  insertSlice({ id: "S01", milestoneId: "M010", title: "Data Quality", status: "pending", depends: [], sequence: 1 });
+
+  insertMilestone({ id: "M011", title: "Builder Onboarding" });
+  insertSlice({ id: "S01", milestoneId: "M011", title: "Schema", status: "pending", depends: [], sequence: 1 });
+
+  insertMilestone({ id: "M012", title: "Shared Components" });
+  insertSlice({ id: "S01", milestoneId: "M012", title: "Foundation", status: "pending", depends: [], sequence: 1 });
+  insertSlice({ id: "S02", milestoneId: "M012", title: "Migrate Pages", status: "pending", depends: ["S01"], sequence: 2 });
+
+  writeFileSync(join(repo, ".gsd", "milestones", "M010", "M010-ROADMAP.md"), "# M010\n");
+  writeFileSync(join(repo, ".gsd", "milestones", "M011", "M011-ROADMAP.md"), "# M011\n");
+  writeFileSync(join(repo, ".gsd", "milestones", "M012", "M012-ROADMAP.md"), "# M012\n");
+
+  // Without lock: M012 blocked by M010's incomplete S01
+  delete process.env.GSD_MILESTONE_LOCK;
+  assert.match(
+    getPriorSliceCompletionBlocker(repo, "main", "execute-task", "M012/S01/T01") ?? "",
+    /earlier slice M010\/S01 is not complete/,
+  );
+
+  // With lock: M012 only checks its own intra-milestone deps — S01 has none, so unblocked
+  process.env.GSD_MILESTONE_LOCK = "M012";
+  assert.equal(
+    getPriorSliceCompletionBlocker(repo, "main", "execute-task", "M012/S01/T01"),
+    null,
+  );
+
+  // With lock: M012/S02 still blocked by M012/S01 (intra-milestone dep preserved)
+  assert.equal(
+    getPriorSliceCompletionBlocker(repo, "main", "execute-task", "M012/S02/T01"),
+    "Cannot dispatch execute-task M012/S02/T01: dependency slice M012/S01 is not complete.",
+  );
+});
diff --git a/src/resources/extensions/gsd/tests/parallel-worker-monitoring.test.ts b/src/resources/extensions/gsd/tests/parallel-worker-monitoring.test.ts
index 227a3c90a..43d775302 100644
--- a/src/resources/extensions/gsd/tests/parallel-worker-monitoring.test.ts
+++ b/src/resources/extensions/gsd/tests/parallel-worker-monitoring.test.ts
@@ -131,14 +131,15 @@ describe("parallel-worker-monitoring", () => {
     assert.ok(!(5.01 < ceiling), "5.01 is over ceiling");
   });
 
-  it("worker spawn args include --mode json", () => {
-    // Verify the spawn command includes JSON mode for NDJSON output.
-    // We can't easily test the actual spawn, but we verify the args pattern.
-    const expectedArgs = ["--mode", "json", "--print", "/gsd auto"];
-    assert.ok(expectedArgs.includes("--mode"), "args include --mode");
-    assert.ok(expectedArgs.includes("json"), "args include json");
-    assert.ok(expectedArgs.indexOf("--mode") < expectedArgs.indexOf("json"),
-      "--mode comes before json");
+  it("worker spawn args use headless --json auto (#2792)", () => {
+    // Verify the spawn command uses headless mode (not --print which exits
+    // before auto-mode can run). See #2792.
+    const expectedArgs = ["headless", "--json", "auto"];
+    assert.ok(expectedArgs.includes("headless"), "args include headless");
+    assert.ok(expectedArgs.includes("--json"), "args include --json");
+    assert.ok(expectedArgs.includes("auto"), "args include auto");
+    assert.ok(expectedArgs.indexOf("headless") < expectedArgs.indexOf("auto"),
+      "headless comes before auto");
   });
 
   it("refreshWorkerStatuses restores persisted workers from disk", () => {