What was causing the hesitation is exactly what I said it was - a high fuel pressure spike at the shifts, then an extreme drop in fuel pressure causing a lean spike. The EEC tries to correct for it, but it's too slow (in terms of computing time) to cure it, hence, a hesitation occurs.
It has NOTHING to do with tip-in spark retard, slipping clutches, belts, etc.. After trying several options with the BAP, I found nothing would pass the Kenne Bell standard for a total "cure". No time delay circuit, adjustment to the boost switch, etc. would make the problem "disappear" completely. We could have probably passed off one of these methods, but it just was not acceptable. After many dyno and street pulls, the correction was found possible within the tune.