Update:
Mooney flew way differently, the significant pitch is now gone,and the yokes move much easier. Check yours bungees, grease is bad, Teflon is good.
However it still oscillates +_60 feet and never settles in.(at 200fpm, but not the 1000fpm oscillations)
During pitot static test found signicant leak on back of airspeed indicator, and seems to be a small hole in the diaphragm on airspeed indicator, so it will get sent in..It appears to be allowing small puffs of pitot air to hit static system and we were seeing the +_60 feet in pitot system test equipment similar to the autopilot.
Also the Stec transducer was vertical instead of mounted horizontal which I guess is a big big no no..
These will be corrected and I will advise after that, but so far big progress.
Thanks