Tom - thanks for your comments. The entire arena fascinates me on multiple fronts. First is that "the problem" had been solved to our (Thiel's) satisfaction by 1983 with the CS3 contoured baffles that practically eliminated diffraction and baffle congestion. I didn't think a further problem existed.
My first hint was a demonstration that Doug Pauley did for a professional group (using a Tannoy speaker), that blew us away. We gathered further observational input from some leading audio industry luminaries, but the mechanics still remained mostly mysterious.
I pursued felt and flocking and Nextel, although I was unaware of Jon Dahlquist's explorations. Some of you beta-tested some of those solutions. They address the problem.
Then there was the CS3.6 thing that some of you reported where sometimes there was a screeching / pulsing / hashing, but no cause could be found. A couple months later I had narrowed down these so called 'sheer or propagation waves' on the baffle surface, primarily the flat area above the tweeter.
The collaboration with Doug has applied his patented surface treatments for real advances toward mitigating a problem that had been unknown, unreported or otherwise invisible - but not inaudible.
BTW: you and I are on similar paths. I also ended up with genuine wool (F11) strategically placed on the walls. Also, there's a somewhat expensive addition via Ultrasuede - the real stuff - in the finest grade. US over F11 is where I was going before Doug came along and opened Pandora's Box. Thanks for the link and references.