The software trumps any WMA or downloaded content with any MP3 conteent, so the moment it believes you have the MP3 of a track it trumps all other types of files. It is also something that is being looked into.
At no time was I saying this is all the labels fault, but it started there with them saying we do not want people re-downloading any non-DRM content, period. To change this requires people very high in Zune and Microsoft talking with the labels to get permission to allow it for specific reasons.
Any downloading error can be caused by the ineternet, the Zune Client, the customers PC and many other reasons. Bad content is another issue that gets effected by this as well. You buy an album but the MP3 audio is for a completely different artist, or skips. All of these are the reasons we are pushing for a change to this, but it takes time.
Even for testing I have to have multiple accounts to verify if an MP3 is fixed or not.
I know it is frustrating, but we are working to get some resolution to this.
That cannot live which eternally lies, and with strange untold eons even death may die.