I received good news yesterday from the Avionics Shop.
Last week, we removed the magneto and sent it to the mag shop for another inspection. They replaced the contact and bearing, both of which were already replaced during the 500-hour inspection. I reached out to Savvy Aviation for advice, and they confirmed that the only likely source of the erratic RPM readings (based on the P-lead signal) was the magneto creating an arc from the point, bearing and conatct. The mag shop recommended reinstalling the magneto, and if the issue persisted, they offered to build a new magneto from scratch to help rule out potential causes during the troubleshooting process.
After reinstalling the magneto, the problem remained. The Avionics Shop, frustrated after chasing the issue for so long, decided to install a new Garmin GEA24B. The erratic RPM readings disappeared and we have a good reading. According to Garmin, the GEA24B has better noise filtration than my previous GEA24A.
I haven't picked up the airplane yet, but I trust their diagnosis. This process was extremely time consuming, labor-intensive, and expensive. My main concern is what will happen during the next 500-hour inspection. If I receive a noisier magneto, I’m not sure if the GEA24B will be able to filter out the distortion, potentially putting us back to square one. It's something to consider for the future.