I know what you are thinking - but the normals are all fine. I also recalculated them, and removed doubles. The mesh looks okay although there may be something weird as it was imported. Anyone got any ideas?
It would help to have a version of this saved before you did the knife project so that we can try doing things with it ourselves. But I can tell you now that you haven’t applied the scale and rotation on your objects, and I’d be willing to bet that’s contributing to the problem.
Unapplied scales are not a good idea during modeling, texturing, or rigging. Scaling in object mode is meant as an option to be used during animation. If you’re making major structural changes, Blender needs to know what the model’s “real” size is. It’s not a bug so much as incorrect use of a feature.
About the project knife missing some cuts, it’s very likely related to the regular knife own bugs too, as it can misses cuts and as the Project Knife seems to share the same code it’s affected by the same problems too.
Fortunately, Howardt is working on fixing those knife bug, he recently fixed some of them in revision 59665 and 59767 (at the time i write, there’s no yet windows build including those revisions available on buildbot, maybe tomorrow) , so i imagine his fixes will then report on to the Project Knife too .
Personally I’d like to see a warning (like applying a modifier not at the bottom) if it doesn’t make sense or can be unpredicatable to do a knife cut on an object with scale (especially as it’s so easy to do for a noob). Anyway, thanks both of you.