Lu,
Your confusion in this matter is that you somehow equate the vertical motion of the transmission (a fact, of course) to the mythological loss of lift of the blades as they pass around the mast. The blades produce relatively constant lift as they pass around the mast (plus or minus about 10 percent). Your belief that somehow the rotor blade loses lift when aligned with the fuselage is not based on fact! The tips of a Huey's blades are moving at 485 knots in a hover, and at 100 knots of airspeed on the helicopter, the blades are also doing 485 knots when they align with the fuselage, quite enough to produce their share of the lift.
The only time when blades no longer produce lift during their rotation is when deep retreating blade stall occurs, and that also produces strong rolling and pitching control problems as evidence of this lift imbalance.
What the rotor systems all do is to have "modes" of oscillating behavior due to the dynamic response of their components and of their soft mounts. In the case of the Bell transmission, the bouncing of the transmission is produced by this dynamic response. If you watch that purple bull with the bobbing head bouncing on the dashboard of a 1957 Chevy, you can't blame the bouncing on loss of lift, because it is producing no lift at all, but it still bounces, much as the transmission does.
The bounce also rocks the transmission, pitching it forward and aft, thus the use of the transducers to help the cyclic channel of the SCAS cancel the vibration.
That rotor/transmission bouncing is an important problem only if the natural period of the bounce matches a natural period of the rotor. In such cases, it must be damped or the control system must be used to help cancel it, or the mounts must be stiffened to quell it.
I have lots of experience with this stuff, I was the chief R&D test pilot for Sikorsky for about 15 years, and we had to handle several cases like this.
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