Did you check the crown on the barrel? Then I'd check to make sure that the breech end isn't nicking the pellets. Did you try single loading pellets to see if the barrel isn't lining up right and getting damaged loading from the magazine?
if it didnt print the cphp's within 1" at 20yrds.... send it back if you bought it new, they have a great warranty
Unfortunately, some Prods came with a "bad" barrel. You may doing everything right, but the barrel is not helping .....I have no fix to give you short of contacting Crosman with the serial number to your gun and talking to them.Even if you have to buy a new barrel, it will certainly fix your gun, and it is a great little gun.
Did you shoot a shot string and have erratic fps readings? The other quick thing to do is remove the shroud & air stripper, shoot a group with CPHP pellets and see if the grouping gets better.
appears you have a poor made barrel, if your crown and your breech oring is ok.the prods usually are not pellet picky...at least the 3 i had were not. crony your shots to see if there at least consistant speeds.
Remove the barrel and push a CPHP pellet through it, inspect head for damage, could be the transfer port was modded for more fps causing all of the problems. My first Prod was used and the guy I got it from said it shot great.. NOT. I disassembled the gun and found the rear trigger to end cap screw was loose. fixed that and my groups looked a lot better.