ZedConroy

I did. I've switched to using blender so that there won't be any discrepancies. The 1st frame in the image below I have the mesh in Blender. The parameters were already how you see them, but I applied the object transform anyway just to rule anything out. I exported this to a collada file. The 2nd frame is the mesh after I uploaded it to SL, saved a collada from SL, then imported it back into Blender. You can see the scale transform parameters have changed, and the shading on the mesh is different as the vertex normals are pointing in a different direction. This will cause problems with normal maps like I showed in my original post. The 3rd frame is again the mesh from SL. If I apply object transforms to the mesh, it fixes any shading issues as the process re-averages the normals. At this point the mesh basically looks like the one we first exported from Blender. The 4th frame is interesting. This is the mesh from SL, but instead of applying the transforms I have just reset the scale (Alt+S while in object mode). You can see that the mesh is stretched to fit inside the volume of a cube. If SL computes the normals at this stage, this is how you end up with the result in the 2nd frame. If a mesh were to fill more of the cubic volume then SL doesn't have to stretch it as much, so the issue with the vertex normals is less pronounced. It is just very evident in this case because the mesh is thin on one axis.

I also couldn't reproduce the issue in Blender, it seems to always calculate correct averaged normals regardless of object transformations. That being said, I exported a collada file from max and reimported it, the normals remained consistent. But if I imported the mesh into SL then saved a collada from there I ran into problems. I've provided an example below. You can see the mesh on the left that has had no interaction with SL has correct scale transforms and the normals are fine. The mesh on the right which was saved from SL has a smaller scale transform on the Y axis, so SL must being scaling the mesh such that the vertices fill the bounds of a box before it calculates the normals. You wouldn't encounter any issues if you were looking at a sphere or a cube as the bounding dimensions are already equal. Again though, Blender does its own thing so you won't be able to see the problem.

Thank you Wulfie, I appreciate it. I couldn't find anything documenting the problem anywhere. It also didn't feel like a 'me' issue. So hopefully this info will be of interest to somebody.

I'm have a problem wherein the vertex normals of my mesh look as if they are being squished upon import to SL. This becomes a real issue when using normal maps as the vertex normals are no longer the same as what was baked. On the top left of the image below is the mesh imported into SL with the bad normals which are having a negative impact on the normal map, below it is a screen grab from the 3DS Max viewport, (note the bounding box) On the top right of the image is the same mesh, now with correct normals, and a working normal map. In order to combat the issue I created two vertexes to increase the bounding box to have equal x/y/z dimensions. Is this a known issue, and does anyone have another way to fix it? The work around I came to for this test obviously increases the LI of the object as the perceived size by SL is now much larger. Any advice appreciated.