I'm still waiting for my order. Can't believe you guys are already talking about how great your lights are or what sort of improvements can be made, and I'm still waiting to hold one. But that's not going to stop me giving my $0.09 (stupid exchange rate)
From what I've read, the reason why the current Arcs are loosing their heads is because when you twist it far enough to switch it off, the gasket is already close to coming out of the housing. It was suggested that the housing be lengthened slightly to accomodate a few extra turns. I second that idea. Just another 2 turns can make a world of difference. I don't think that would increase the length too much. Besides, so long as it is not much different in size from the Maglite Solitaire, I think it would still be acceptable.
Another is the use of 0-rings instead of gaskets. Diving torches use o-rings all the time. They seal well against multiple activations and can be replaced easily when worn. A little bit of silicone grease also helps to make it more water-resistant while at the same time reducing the force needed to turn it. The user can decide how tight he wants it and apply the grease accordingly. The difficulty here is finding a size of o-ring to use that is commonly available. I would guess taking a look in the local hardware store's plumbing department might help more than looking at your local dive store. Mainly because plumbing is more common than diving, but also because most diving gear would use o-rings a little too large for the Arc. (The smallest I'd seen in the the dive shop was for the regulator to tank assembly and that would fit a AA size of light.) BTW, the o-ring should be a little tight and need to be stretched by 1mm-2mm when fitted. This ensures proper fit and seating.
Another thing is the position of the o-ring, in case the commonly available sizes don't quite fit your current designed size. You can either situate it where it currently is, which I believe is in the middle of the head. Or you can move it to the end of the head, closer to the battery, so that the o-ring is the first part to go in to the housing. That would give you a design leeway of at least 2-3mm. I can send you a scan of a drawing of what I mean if you wish.
When the Arc is switched off, the battery is no longer being held by the contact and this allows it to rattle around inside. Pelican have solved this problem in their Mighty Lite series by using a spring shod with a plastic shoe. The shoe fits to the end of the spring pressing on the battery and insulates the spring from the battery. But when the torch is screwed to the on position, the spring compresses and the contact nib travels through the centre of the spring and contacts the battery. The added advantage of having the spring is that it provides a force against the threads all the time. This would keep the head from rotating loosely when the Arc is turned off.
Phew... more than $0.09 worth.
Email me if there are any points you need to clarify. A picture paints a thousand words but I don't know how to put it up on the web, so if needed, I will send drawings by email.
Gransee, good luck with MOD2.
BTW, with only 5 hours runtime in the AAA model, have you thought about offering a AA model for longer runtime? I would certainly buy both as I have differing uses for each.