SASless,
A very well stated question!
As I see it, there is no old and new. The first rotors ever flown acted in extremely complex ways, ways I'm certain were not fully understood at the time. Knowledge was quickly gained by manufacturers/designers/academia--I just think that the engineering understanding has far outstripped the abilities of instructors to comprehend and then teach to students. Practical instruction has never been exact in any complex field. Usually the basics are covered, but those basic simplifications don't fundamentally conflict with reality.
In rotorcraft, instructors teach one aspect of a complex topic, neglecting other, significant factors that also weigh in. Teaching that the blades fly to a position or are governed solely by gyroscopics, while not really correct, has some basis in fact. The problem lies in the number of variables affecting the way the rotor behaves. Gyroscopic precession is a simplification of one very significant factor defining a rotor's behavior--rotor inertial mechanics--but leaving out everything else is a disservice to the truth.
does an imperfect demonstration allow for an almost but satisfactory understanding of a nearly impossible topic with any real clarity?
It depends on the need. As I see it, the primary point that pilots must understand is that rotor blades don't respond immediately. The more we add to this, the better. However, if the balance of knowledge means being able debate the intricacies of rotor dynamics at the expense of understanding weather, regulations, etc, then perhaps we can't expect everyone to be able to learn and understand this fully. A demonstration of gyroscopic precession is useful, as a gyroscope emulates much of the behavior of the helicopter rotor. However, the key is to instruct that it's much more complicated than that (even if you can't define how).
If rotor dynamics and reactions to cyclic inputs vary from the theoretical does it mean the laws are imperfect or the teaching and understanding is imperfect. Is the old language and new concepts at odds there?
What new concept? I'm relatively new to this (young engineer) but I don't believe this knowledge is new to the world. Forums like these and Lu's obsession with the R-22 brought it to our little corner on the 'net here, but I'm not so certain that instruction or what's known in industry or academia have changed recently.
....does this mean a partial transfer of knowlege or a complete transfer of complete but wrong knowledge?
Good question! I don't believe what's been taught (and presumably what will continue to be taught) can be called anything close to complete. But by teaching newbies that the rotor is not just a gyroscope I think we can move closer to a partial transfer of knowledge without it being wrong. It'll just be incomplete, with room for more knowledge to be gleaned without the old baggage that currently gets in the way.