Well Dave...his settings are pretty much the same as yours...(even to the point where it said: Streams: 1SD/2HD(WAN);1SD/2HD(DEV)...however...
At his place, I had a different HD channel fired up on all 3 HD-TV's.
Not satisfied I went to the main box and started recording 3 HD shows at once...then had him put it on an SD channel...and voila...it worked.
I still didn't believe it, so after about 10 minutes we watched the 3 HD channels that were recording...and all 3 were perfect.
So at this point I don't know what to say...whether it's an anomaly...who knows.
Perhaps an MTS Tech will pop on and enlighten us...if he's allowed.