To sum up this thread...

1) I think the position the RC is in is an incredibly challenging one. But overall some form of an MFH cushion to "protect pilots from themselves" is important and adds to safety in general.

2) I think ANY penalty will cause the bad behavior which is pointed out in the very first post of this thread. The amount of penalty is almost irrelevant unless it is reduced dramatically.

3) I think a moderately reduced penalty structure (1/3 of current, or less) should be applied to a higher MFH standard (1200/1000). This would widen the margin of safety for a pilot trying to circle while making the penalty more acceptable when it is clear that little chance remains for saving the miscalculation.

After that the PIC is simply on his or her own. If they want to circle at 800 MSL for awhile and try to get above the administrative land out level....good luck to them. The rules have done their part in trying to encourage a safe approach into the finish and pattern and landing. And in most cases, that pilot will still have the energy for a safe pattern even after fighting for a while...

Sean