Dear Joe,
First of all, I'm surprised that you have to go as high as 3 to quieten the unit down due to wave movement. I suggest you run the unit in the discrete discrimination with the discrimination set at 2 where you are having problems with the waves. It should be running fairly quiet at these settings. If it is still getting noises from the waves hitting the coil, then I would get the unit checked, especially the coil as there may be a problem with the shielding.
Now in regards to the air testing of targets with any pulse induction detector, don't, as they use the mineralisation and sand to energise the target. Air is not a good conductor for pulse induction detectors and therefore air testing response of targets will and can be very misleading. In very basic terms, the targets are not getting the proper energising signal, so therefore the signal strength decays quicker, giving the effect of loss of the target. Another thing that will affect the detection of small rings is the pulse rate frequency that the unit is running at. The higher the frequency, the more sensitive it will be to smaller targets, but a loss of depth will occur and the opposite occurs with lower pulse rate units.
The discrete discrim mode has been enhanced for gold rings, so as I said before, use this mode and it should rectify your problem.
Give it a go and let us know the results.
Regards,
Phil