Well I have been obsessed with this all day trying everything to see if the camera is physically defective or it's something software related. I ran everything up against the lens calibration tool, Lenses are all functioning fine with AF, so no issue there. The DA*60-250 just isn't fast enough to catch my dog running right at me.
I reinstalled 1.11 firmware and upgraded LR to 5.7 from 5.6. Something happened when I did that. I honestly feel the AA filter was bugged and stuck in the AA on setting as I tried bracketing them and they all looked the same. This is what they look like now, more like a sensor with no AA filter. I think the AA filter was stuck on somehow in the software. This looks even more clear on my monitor. Big improvement.
Another thing when I was checking all this. The K3 is outresolving the 16-50 at F2,8, it's soft in this area and you can't really see any improvement between the K5. When you stop down you see the increase in detail. Looks like we are hitting the limits on some of these lenses. The K-3 IS out-resolving the X100s now, although that Fuji sure holds it's own.
K3/K5 Firmware reinstall
K3 X100s 5.6