Many thanks for all the suggestions. Let me tackle them in order.
- Bit following the grain: I don't think so -- it does the same thing in plywood.
- Check the auger diameter: It's dead-on the chisel diameter for all bits.
- It shouldn't happen: I agree.
- You'll have the same problem with all mortisers: I hope not.
- Half-moons are normal: see 4. above.
- Scary-sharpening might have thinned the chisel: I doubt it -- I began with 15u paper, and some of the old score marks left from manufacture are still there. Could be, tho.s
- Sharpen chisels at the inside only: See 6. above. I have the Lee Valley sharpening cone set but haven't used it yet.
- Auger may be set too low: I was using the 1/6" gap suggested by Delta. I tried the nickel/dime approach but it didn't seem to help.
- Try reseating the auger at a different angle: This does make a difference. I'm beginning to think the axis of the chisel is not parallel to the auger. It's hard to see if the augers are not quite straight because their tips are just blunt pyramids.
- Make sure augers are not set too low: I think this is an important point. Nickel, dime spacing is OK, but what really matters is how far the auger protrudes from the chisel and whether its shoulder is nearly resting on the corresponding shoulder on the chisel. Not touching, not squealing, but almost.
I'm going to complain to Delta, and at the same time buy one better-quality bit to see if that helps.
Any suggestions at to which brand is best?