1976 2.0 FI
Runs great, hunts a little (from 700 to 900 rpm) at warm idle.
Coming to a stop, the RPMs drop from the running rate (3,500) to a single bounce around 2,000 rpm, and then drop to almost a stall before coming back up to 800.

Thinking the decel valve may need to be adjusted, I pulled it out and put a vacuum on the control (small) port. I can put 27 in-Hg vacuum, and the valve doesn't open. I have loosened the lock nut, and turned the adjuster, but it doesn't do anything. Hit it with PB Blaster, but can't seen to get anything moving inside.

Anybody ever had this issue? Resolution?
Would this cause my idle drop issue, or is it something else?
Thanks.

It's something else. Hunting at idle means a lean condition. Turn the knob on the ecu clockwise to richen it. Just one click at a time. It takes a second or two to catch up. But, you need to adjust the throttle position switch first. The decel valve is just an emissions thing. Won't affect how the car runs or idles

Yep. That was the next to last FI part I changed. It had a very small leak. The only difference that I noticed was muted popping upon deceleration and only during the first few minutes during warm up. Cab is right about the adjustments but I would add you need to adjust the air mixture screw along with the idle control. But all of this is wasted time if your vac system has a breach. The one that evaded me for the longest was #2 injector seal. Because I had replaced it I assumed it wasn't leak leaking. Even after members were telling me to check that. Other commonly overlooked items; oil filler body gasket, cold start valve, TB shaft, TB gasket. Do you have access to another MPS to try. Mine was similar to yours when coming off the Hiway but wanted to stay at 2000rpm for a while. MPS change out cured that and was the last FI part that I replaced. That 76 is great on long hauls. I've driven mine 11-12hrs str8 thru.

Replaced all hoses, and have searched everywhere for a vacuum leak with propane.
MPS had failed, so I had it rebuilt. Also bought another one...No difference between the two. Looking at the TPS, it appears that there are some worn spots. Is it possible that the TPS is cutting of the fuel when I release the gas pedal?

If it has a bad spot replace it. Yes it could but at the injector. Wouldn't shut it off at the fuel pump.

Worn spots on the tps will cause the misfires at cruise, but it has to know when the throttle is closed. That can only happen if it's adjusted correctly.