Hi,
There have already been a number of good suggestions in this thread, so I don't have a lot to add, but I wanted to mention some useful tricks and clarify what people are seeing. If you're having a hard time chasing down a problem, the best thing is to get in touch with tech support so we can give you individual attention.
There are two different issues being discussed here
- Altitude hunting
- Pulsing on the stick
Before I get to those it's important to always check two things when troubleshooting the AP:
- Make sure there are no servo SLIPS (annunciated on the PFD screen)
- Check the linkages from the control surface all the way to the servo arm for SLOP (more on that in a minute)
If you have either of those things you'll save a lot of time by addressing them before trying anything else.
On the pitch axis, the advice to adjust the settings per the settings guide to get airspeed hold right is the key to good performance. One word of advice: don't over do it. If increasing settings stops improving things, stop there and maybe back off a little and you'll be right on.
Low frequency altitude hunting (many seconds per cycle) is usually a result of having ALT_GAIN set too high relative to VSI_GAIN. The default settings work well for the majority of airplanes: ALT_GAIN of 0.6 and VSI_GAIN of 1.5 is pretty close to the middle.
As mentioned, slop can cause hunting too. If you can trim against the servo slightly and the hunting goes away, that's a good indication of slop in the system. When we improved the trim sensing and introduced autotrim a number of airplanes turned up with slop which had previously been hidden by the preload due to being out of trim.
Another cause of low frequency pitch hunting is bumping up against the airspeed limiter. In that case you wont hold altitude well at all.
(Note that the AP either tries to hold airspeed or altitude - it can't do both withtout access to the throttle.

)
Higher frequency pitch movements can have a number of causes.
- The AHRS can be bouncing around on a flimsy mount
- The airspeed input is noisy (this will make the AHRS pitch jump around)
- Many of the pitch settings are turned up too high.
The first two are difficult to diagnose without more detailed information; the latter can be addressed by running the airspeed tuning process.
Hope that helps some,
Lawrence Doan
Autopilot Guy