Wow, bummer to hear of all the issues with the MM-4220. I had the MM-4210 and thought it was a great piece of gear, with none of the problems you're mentioning.
The 5ma phantom is pretty silly, but the overloading makes me wonder if there is problem with your particular unit or how it is being used.
To help track things down, can you give more info on your recording chain? Are you recording directly with the mm4220 using its internal CF recorder, or are you sending a signal to an external recorder? If the latter, what is the recorder and are you sending it an analog signal from the 4220's XLRs or are you sending a digital spdif signal?
I'm also confused by your description that the inputs of the MM4220 are clipping. First off, the 4220 is supposed to take a max input of +12dbu, which is a really hot signal. Second, if it is truly clipping on the inputs, changing the gain shouldn't have any effect on whether it clips or not.
A preamp or mixer like the 4220 can clip on either its inputs (meaning you are feeding it too hot of a signal) or it can clip on its outputs (meaning the input signal level is fine, but the mixer cannot output that hot of a signal after applying whatever internal gain you are using). If the clipping depends on the gain level, that sounds like output clipping to me, not input clipping.
Somewhat oddly, the 4220 is spec'd to accept a max signal of +12dbu (very hot for a mic, and pretty much impossible for a dynamic mic to clip -- you'd probably need sound levels in excess of 150db to accomplish this), and also is spec'd for a max output level of +12dbu.
It doesn't sound like you have an input clipping problem, but if you do, you definitely have a bad unit. If you are experiencing output clipping, can you tell what you are using for trim gain and master gain? You mention using the +48db base gain, but the 4220 adds onto that up to 12db of trim gain and up to 12db of master gain, for a maximum total of 72db of gain.
For the ensemble you're recording, it wouldn't surprise me at all if you a clipping the outputs if you are using +48db of base gain, plus 6-12db of trim gain, plus 6-12db of master gain. That could easily get above the max of +12dbu on the outputs, even using dynamic mics. For dynamic mics using the +48db setting, I don't think you'd want more than 3-6db of gain on each of the trim and master knobs. For condensers, I'd never set the base gain past the +24db setting.
I don't know if that helps or you tried all that, but I'd say that if you are having input clipping, you have a bum unit. And I wouldn't think you'd have output clipping if you keep the trim and master gain knobs at the +3db setting, but easily could if you go beyond +6db on those knobs if you're using the +48db setting.
Maybe that helps, but the 5ma max for phantom is still a pisser.