Final Diagnosis and Fix:
After a heck of a lot of dry firing and trying to replicate the malfunction at will, I finally figured out exactly what was happening.
Pulling the trigger moves the 'trigger bar' (don't know the real name) forward. The second 'step' on the Trigger Bar pushes the sear forward, which releases the hammer.
The problem occurs because there is a small amount of play in Bolt Slide when the bolt is in battery (the actual bolt does not move). If the bolt slide is back far enough, it contacts the angled portion of the trigger bar making the entire trigger bar move DOWN as it moves forward. The 2nd step slips from the sear immediately after the trigger is pulled, after which there is nothing holding the sear so it cannot clear the half cock notch on the hammer.
I filed a very small amount of material off the angled portion of the trigger bar so that it would no longer contact the bolt slide while the bolt was in battery.
I can no longer make the gun half strike or malfunction.
Also, for some reason the bolt stays locked up better after the trigger is pulled where as before if I pointed the gun upwards and pulled the trigger, the bolt would just fall open.
Anyhow, I need to do a full function test at the range but so far everything seems better. Maybe an out of spec part or just loose tolerances were to blame.
Of course, I accept no responsibility if others attempt this fix.