While the great scientific debate on lube, delrin and chafing of parts has ensued, I switched out the DN163A0's (Series 3) for DN147A0's (Series 7). There was no hesitation in throttle response, they just crept along on the first notch (01) of the throttle. I then took the old DN163A0 decoder and put it in an early DCC ready GP-40 (pre-sound), and it did not exhibit the hesitation or sluggishness, it just crept along at the first notch.
Inspection of the motor between the GP-40 and the C420, the C420's show a greater skew of the armature. The winds of the armatures are almost indistinguishable without pulling it apart. I then compared it to Atlas GP-9's which had the same skew as the GP-40. At this point I am largely convinced this is a motor difference (not issue) and motor control capabilities of the old decoder. Given the change in decoders also changed the performance I am also leaning towards tehachapifan's point concerning the quality of the decoder.
Thanks All,
The S.