Looking back in my long rambling answer I noticed I never answered the direct question "where did the other shares go". 

They were discarded BEFORE working.  cgminer records that as DW

cgminer is a little more advanced that other miners once you request a getwork() it can end one of four places:

A is Accepted Share (what we want.  Work submitted and credit given by pool)
R is Rejected Share (Work submitted but rejected by pool)
SS is Stale Shares discarded (work completed but not submitted because already stale - just as bad as rejected)
DW is Discarded Work items (discard work because it went stale before work began - puts more loan on server but no GPU time is wasted)

Often people look only at R but cgminer doesn't submit work it knows is stale so really you should look at R + SS both are work you did and won't get credit for.

I find the most useful metric is U (Utility.  How many ACCEPTED shares per minute do I generate).  A high U(tility) means high revenue.  U is subject to variance so I really only look at it after cgminer has been running for 4 hours+.

With my 3x5970 rigs I try to maintain ~30 shares/min.  Man I thought this one was going to be short ... failed again.