Right now I launched with an X-1 I loaded in M-7, jumped to N-2 and tried launching in the ship, it acted as if it didn't have an engine.

I exploded, being homed at C-2, grabbed a taur and jumped to N-2 and re docked with my own capship. I then relaunched with the taur and it worked. Weird.

I get the feeling that this was a broken ship from one of the previous updates.

Yes, exactly. It is likely due to a broken ship from when they were jettisonable.

A client update is being released shorting that prevents that type of ship from being used.

Everyone should report problems related to this if it still happens after the 1.8.277.1 update.