Lever arm is another good thought. If the second stage diaphragm was the culprit I feel like Wibble's tinkering would have pretty quickly seated it. Cracking pressure would have had to slip really low to allow the described violent flow which wouldn't resolve, plus, seemed to resume after repressurizing.It shouldn't be - the second stage is generally only reacting to the pressure in the hose. Its not talking to the first stage.
My guess for freeflow would be more of a second stage issue than a 1st stage. Blocking the mouthpiece generally works to stem a flow. I would check the breaking effort and see if there is anything funky going on there, and what your lever action is looking like.