No luck solving this issue. I have not received any advice from Husqvarna or any owners. I have read on the web of others having this same issue and have not seen anyone post a solution. I really like everything else about the mower so I want to keep it, but it does bug me that I can't mulch well. For now I have been bagging almost everytime I mow the yard. I am sure the problem lies with the inadequate mulch plug. I may try to jerry rig something to make the mulch plug larger so there isn't a spot under the mower deck to let grass accumulate and then drop every 10 ft or so (If I make the mulch plug larger then there will be a complete circle under the deck). Sad that I have to jerry rig something on a brand new $500 mower.