I wouldn't get too concerned about occasional high numbers,  I have also observed intermittent spikes in DH% even on earlier versions.

I think it's best to leave it set on --avalon-auto and let cgminer do it's thing, after all the programmers have put an immense amount of work into this and I'm pretty sure they know what works best.

@ckolivas, are communication errors used in the DH% calc? Considering the issues with the avalon controller this would explain the intermittent peaks.

I have also noticed that it takes a fairly long time for the DH% to return to it's previous average, would it be possible to reset it quicker?