38:1 -- is that with the jet engine extended, gear retracted?

Yes- gear retracted, engine extended but not running.

The biggest cause of the terrible performance of the Arcus M with the prop and pylon up is the fact that the two huge 6 ft. long doors remain open and the big engine bay and the rest of the hole in the fuselage gives all those draggy little air molecules a place to run around before finally jumping out.

The ASH-26E appears to have smaller doors and a smaller engine bay, and possibly less drag because of this.

And for those of you who still don't believe, 495 fpm is 8.25 feet per second. 60 knots is 101.27 feet per second. 101.27/8.25 = 12.275.