Re-generate new controller if you did before.

Import reference smds instead

Originally posted by Misfire!:

Can you explain further? Why is a modifier needed where none currently exist in my project and 2.71 doesn't seem to require one to work correctly?

A picture in 3D viewer with the outliner included...

https://gtm.steamproxy.vip/sharedfiles/filedetails/?id=1505158060

Because that's how it does work in Source.
If it's not ragdoll, assign all vertices of collision mesh to Base bone vertex group. Or parent collision object to base bone. In both cases apply transforms of that collision mesh. Re-export.

Collision mesh should have Armature modifier added as well

That's what I refered as reference pose. One with un-applied transforms

Multiple $model statements are not allowed, use $body instead

And you mentioned (one) exported SMD while there are multiple smds in qc...

Exported mesh is built against reference pose of armature and mesh objects, not that you see in blender.

In qc there might be $definebone lines that re-define reference pose.

No, they won;t be kept for model, but you can make animations, and all constrainted bones motions will be re recorded and exported as well.

I did never import .qc file as it was always buggy and did import many unnecessary information.

Does the model exist actually?