Thank you Minotaur,

ph_setcorrections did the trick. The only remaining problem is the limited number of elements in the test rope. The physics engine appears to support up to 20 without any problems (~60fps), but will drop down to 1.5-2.9 fps with more elements.

I know upgrading might help, but I am reluctant since upgrading software in the past while developing has always resulted in headaches.

-gcoakley