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The way the Pre alt works is when you set the desired hight the AP will use the grey code from the Altimeter till you get to aprox 50 ft of the set hight then it will switch across to the ADC in the nose this will be shown on the mode selector by switching from pre alt to cap were the signal from the ADC is used to control hight. the most likely cause of the system dropping out is a faulty ADC .
Collective issues may be due to miss alignment of the collective transducer.
Heading hold in hover maybe a u/s air speed switch.
HR GREENIE