An 1800 mah LiPo is really cutting it in weight. I don't think your heli has adequate power to lift all that weight. Try adjusting the gain some more, but I think part of the problem is you're weighing down your heli too much, it's torquing one way and the tail is compensating but over compensating and then the gyro undercompensates to bring it back and the cycle repeats. Your motor is working harder to keep that heli up, and when it adjusts the tail rotor speed the main motor speeds up or down, as the tail motor speeds down or up, so the heli is also dropping too much because of the added weight and you're getting all sorts of problems. I could go on but you get the idea.

Weight your heli. If it weights more than 11.5 ounces with battery, you've got a problem and you need to cut weight.

As far as brushless setups go, I don't think it's worth it in the end. The Blade is a nice heli, but its strength (the simplicity yet effectiveness of its design) is also its weakness. The main frame is a simple plastic " T ", it's one piece for strength but if you break one small part of it and you're going to have to get a new main frame after a few tries with C/A. As I see it, there really isn't much of a point to go brushless with this heli. Sure, you'll get more power but is the heli really designed for it? I don't think it is. Sure, brushless motors are lighter and more efficient, but you'll be adding more weight with a brushless speed control. You'll have to tinker with the gear ratios again, and there is so little room for a brushless motor in the first place that it'll be tough to find a good match. As cool as going brushless with the Blade sounds like, I think it's not worth it. If you want to tweak it to the max and do all sorts of junk to a heli, get a T-Rex. I'm gonna keep flying my Blade of course, but I've gotten my next heli planned out (T-Rex 450XL CCPM) and will be getting it in late November probably.

The most I'm willing to do with my Blade is change out the radio system (done), go LiPo (done), get Carbon Fiber blades (done), and maybe get a higher-performance tail motor and/or a nice vertical fin to replace that dinky little vertical tail support rod that breaks too easily.

But anything else to me seems like a waste of time and effort and money. However, there's still the mantra that "we do it because we can", and I'm sure someone will or is in the process of converting their Blade to brushless. If you do, more power to ya. If there's a really significant improvement in the heli's performance, then I'll have second thoughts about plopping down another $120 to go brushless.