Your $cdmaterials command points to models\props\ramp, which should be a folder ("cd" means "change directory"). Your $basetexture parameter also points to models\props\ramp, which should be a VTF file.

One of those is wrong. :)

QC and VMT please.

Make sure that your QC file is the last thing given in the command. It seems that currently "-h" is. Other than that I've no idea - this is nothing to do with Blender.

The Source 2 limit is four weights per vertex. The compiler will cull anything over that and issue a warning as appropriate.

Aside from the difficulty of working out the edge of the selection (which would be very slow in Python), you'd have exactly the same problem as trying to do it over the whole model. Just with harder-to-spot errors. :)

Since this only affects a handful of files in a legacy format, I suspect that manual fix-up is the best solution you're going to get.

That's what I've been doing, but it breaks contigious meshes because each "island" you create ends up seperate from the other ones.

If you're really keen you could sign up to the developer mailing list and start a discussion about improving things, but unless you're also prepared to write the code I wouldn't expect much action.

Currently the operator only cares about vertex location. It it should be taking into account weightmaps and normals too, and should also look at face normals to ensure that it doesn't remove back-to-back polys.

It also ought to be more consistent when preserving edge flags (e.g. sharp). That was my original request...since then BMesh has been merged in, so it might be easier to support now.

I've asked for improvements to the operator before but there wasn't much of a response. Feel free to make your own attempt. :)

Unfortunately I've not been able to fix this as I don't have fine enough control over Blender's "Remove Doubles" operator. Anything I did that worked with your example file (two seperate objects) broke importing contigious objects with overlapping parts and vice versa.

What I've done instead is add a new import flag which skips the Remove Doubles step entirely, allowing the user to fix the problem manually. Here's an unofficial release.[steamreview.org]

I can't reproduce the problem. Which version of the tools are you using?

Please also upload your blend file: http://www.pasteall.org/blend/