BrewBama, I expect this is very equipment-specific. For instance, you and I have recently had very different experiences tightening up our mill gaps, as I recall. I also recall your confusing me with that Darcy's Law business, so I probably can't tease out the details as I'd like. But I can imagine that conversion and lautering might both be affected more in a single vessel, especially if you recirculate, due to the issues you raise. If you use a separate mash mixer that is stirred and a lauter tun, finer should (as in my experience) be just fine. Conversion is ensured by stirring, which won't compact the bed, and then it's just a matter of letting the flow rate in the lauter tun set itself. Maybe. It seems every topic lately on grain milling has come down to the caveat that you have to empirically determine what works best in your brewery. I vaguely remember that podcast but not the brewhouse design involved.
(Looking back on my logs I don't seem to have seen any change in efficiency since going from 0.030" to 0.025". It just lets me run wheat together with the rest of the grist.)