Then the only thing that comes to mind is HOW the MSC-400 sends CTRL-D, and how the software expects it. Maybe it's too brief, or the combination of CTRL and D commands is too fast or too slow...

Have you tried playing around with the O/S keyboard settings, ie. repeat delay and rate? Could also be some wacky issue with the specific USB controller or driver (especially if no one else has reported this).

I'm inclined to think that the MSC-400 is doing something different but not necessarily wrong.

I've always had a problem with an MX-900 and my MCE system (with built-in IR receiver) - basically it keeps sensing a single button push as multiple pushes; happens on both IR and RF. The original MCE remote works fine; the MX-900 controls another MCE system fine; and an MX-700 controls the troublesome MCE system fine. So it's something weird between the MX-900's way of sending codes and this specific MCE system.