I called Hornady customer service today to ask about sending back my bullet feeding die for inspection. They told me some interesting stuff that seems to have solved many of my issues.
1. Case Flair....it has to be .387. Mine was so we are golden except that I almost never trim .38 special brass. Looks like I'm going to have to as it is critical to the bullet feeder die performance.
2. Setting the top collet: Hornady instructions say to back off 1/2 turn once contact is made with the lower collet. Well, the tech guy says forget that. To prevent bullets from passing through the lower collet prematurely, just back it off a hair from touching. He said this adjustment is not really critical unless you need to pre-load the lower collet to tighten its grip a tad. So, I have mine less than 1/16 of a turn from totally locked down. It doesn't rattle and that's OK.
3. The Final Adjustment: Hornady written instructions say to insert a flared case and raise the ram. Then screw in the die until contact is made and then go 1/2 turn in from there. Tech guy says this adjustment really matters. In this case, he said to start with just 1/16 past touching. I did and things improved right now. I fiddled with it a tad and found the sweet spot that feeds a single bullet nearly 100% of the time. If I had trimmed the cases I believe it actually would be 100% of the time.
All in all, the feeder now works but it's a lot more finicky that the MBF system. Key point here is that the adjustment of the upper collet is not critical except if you need to preload the lower collet to keep tension on the fingers. I did so now my fall through problem appears to be history.