I'm thinking the dropping down a gear is a function of the length of your stick, the weight of your shift knob and the angle you have set on your shifter. I'm pretty sure the Lokar relies on the detents in the tranny and doesn't have detents of its own between 3, 2 and 1. The "rooster comb" in the tranny doesn't really have a lot of holding power, so if the combination of stick length (leverage), knob weight and angle of the dangle are just right, they can overcome the rooster comb with a slight bump. You could drop your tranny pan (always fun), pull out the rooster comb and bend it a little to put more tension on the detents... might help.
I, too, have struggled with setting the safety switch. The little nubbin they give you for that purpose is helpful, but the real trick is setting the depth on the switch itself. I used some super thin washers to move the switch out a little and that eliminated the overlap between neutral and third (or reverse, depending on which way you are adjusting).
I also have the low gear problem. I think the locking point between 2 and 1 (where you have to push the button to get to 1st) is a little off, at least in the TH350 version. On mine, I can get into first before I hit the lock point, which almost launched me through the windshield a couple of times! :welxome: As far as I know, that can't be adjusted.
EDIT: I originally said "the overlap between neutral and first" above... I meant between neutral and third. :doh: