With the pickup balance knob set flat (at the notch) is it normal for the volume to be a bit less than when it is set toward either pickup?
Ive always found that too. It seems to be normal, dont worry about it. The same happens if you have a volume/volume setup, turning both on full gives a slight dip in volume, roll one back a little and its a little louder.
The same story with balance knob. It should be shifted a bit from center position to make sound a little bit louder.
Heard this is due to the pickups loading each other. Found a fix that seems to smoth out the problem and on the side made the tone dial in better as well. Have used this solution on a number of double pickup basses with sucess. Add a 47K resistor on each hot tab of the pickup before the volume or blend pot. Source was here: http://www.guitarnuts.com/wiring/stockgibson.php David