Are the dropped stitches right at the start of the row, or mid-row?
For stitches at the start of the row -- are you manually wrapping the yarn around the outer needle to ensure it knits, or ensuring the yarn wraps the latch as you come back to start the row? Either way will work, so long as either the needle or the latch gets wrapped; if neither happens, the first stitch will be dropped since the yarn won't be there to "knit" it.
Another first-stitch problem I run into sometimes is my outer cam and my inner cam (sorry for the bad names) aren't rotating freely against one another -- not sure if the oil got too gunky or what -- if you notice, when you change direction, the lower/outer cam needs to sit still until the inner cam "engages" it (usually it has a bolt or a sticky-outy-piece that "hits" part of the outer/lower cam) and starts it moving again. If it's too sticky, the outermost one will start moving early, and the needles won't go up-and-down at the right time -- wala! dropped stitches.
Stitches missing in the middle of the row are usually, for me, due to the knitting getting too tight because my yarn got caught up on something and I didn't notice.
Keep trying, keep your eyes open, see if you can spot something as a cause. All of the above I figured out only after many dropped stitches. But I did figure it out :-)
(posted by me this day on sockknittingmachines)
