I'm grateful for everyone's work on this issue, and I sincerely hope it can be further improved or fixed before MC20 is put to bed. My symptoms seem very similar to Andy's. When the Mac is busy, dropouts are more likely. I've also found that rapidly moving the volume slider (I use internal volume) exacerbates the problem ie helps cause them. I can also cause them at will by opening many apps at once. My normal use is MC plus a few apps, notably firefox with 20-50 tabs.
My system is different, but similar in that it's i5. 2012 mac mini i5 with 10G RAM, apps on 500G internal HD, and music on 3TB My Book connected via USB and running OS 10.9.5 latest. Doesn't that make it less likely to be an OS problem? I also think earlier version of MC had fewer dropouts. My file types are aiff and flac, but I can also get dropouts from radioparadise at 192k. It does seems that higher bitrates are slightly more prone to dropouts, but I can't tell for sure. Is it possible that raw horsepower helps others avoid this and i5 mavs are more prone to it? Should we start a new thread calling all i5 and i7 users to report on their systems, use, and dropouts while under heavy load? This would give a better idea of how widespread the problem may or may not be. Does JRiver have an i5 to test with?
I ran some of the tests that glynor suggested and got interesting results. Made all these changes one at a time with no effect until noted. Disabled media network share, set SW buffer 250ms, disabled app nap, turned off integer mode, and rebooted here and there for good measure. Then set HW buffer to max and bingo! It greatly reduced the dropouts. When opening 12 apps, that process was much much faster. Before it was maybe a minute to open 6, and now with HW at Max, all 12 were open before I could test MC.
Then I backtracked, one at a time. Somewhere (I think after enabling app nap) I got some periodic clicking sound that almost sounded like a scratch in a record. At some point it went away and I'm having trouble reproducing it. I then reenabled integer and got about 5% music 95% dropouts. Further testing seems to indicate that integer mode is incompatible with HW Max on my system, and it's 100% reproducible. Can anyone replicate the difference in app start times HW buffer Max or the incompatibility between integer mode and HW buffer Max?? I assume my next steps would be to get you a log file and then rename the ini file to go back to default, right? Anything else I should try, maybe earlier versions of MC?