Hi Chandru,
Blocks on NAND chips can and do go bad, and chips often come from the
factory with bad blocks.
It looks like Yaffs has marked four blocks bad, which is probably to
be expected if this is the first time you've run yaffs on this device.
 In my experience, after an initial flurry of blocks being marked as
bad, things will settle down and blocks will stay good for a long
time.

If you can read and write files reliably to the Yaffs partition
without excessive numbers of blocks being marked bad, then I would
believe that you have set Yaffs up correctly.

NAND drivers are often all or nothing, either it works properly, or it
really doesn't work at all.

Hope that helps,
Brad