Don, what a great experiment!
This experiment points out why I never try to say "this is the correct
PSI" or "this is the correct thinning ratio", as far too many variables
can play havoc with such finite statements.
There can be significant loss in any pneumatic or hydraulic system, and it is one reason why I have a regulator mounted at my booth. I'm currently using a 6' braided hose with inline moisture trap, but have the 4' vinyl hose in my airbrush toolbox. As I have two moisture traps (one on the compressor, and one after the regulator), I think I may swap out the braided, and see if I can pickup a PSI or two! I've always used braided hoses as I was told that the vinyl had a tendency to lose pressure due to flex in the hose. Braided hoses resist that tendency, but perhaps the length equals that out? The vinyl is certainly lighter!
One thing I do is set the air pressure with the trigger open, so that my reading is, at the very least, not reading a false pressure. Once I set my regulator, I adjust pressure "off the model" until it is spraying in the manner I want, and I don't actually pay attention to the amount of change. Perhaps I should start keeping logs? Hmmm, must think about that...