I had a 716 (sold it to make a couple hundred off it a couple months back) that ran great. I only put about 80rds through it though, but ran great. When I first got it, I didn't break it down at all before shooting it (just ran a bore snake through it at the range I purchased it at, and then started to shoot it). I got 1 magazine of 150gr Federal American Eagle through it and then after a couple rounds in the next magazine it started to fail to feed (short stroke). I realized it was dry, and pulled the bolt out and oiled it a little bit. Guess what? The next two magazines of 150gr American Eagle I ran through it went without issue. Then after that I put a magazine of 168gr Hornady Z-max through there and same thing, ran perfectly.
Fast forward to now, and I have a 516 that runs .223, 5.56 and .22lr all on the 'normal' gas setting and its had 0 FTF/FTE issues after 735rds now. The first 130rds I ran some regular CLP that was MPRO-7. Since that I've run Frog Lube (paste) in the 516 and it works just as good as the liquid MPRO-7 CLP, it just doesn't dry up like the MPRO-7 does.
Point being, is there are several people whom have stated their 516 run like ****, and won't cycle .223 unless its on the 'adverse' gas setting.
That said why don't you try running your rifle on the #2 'adverse' setting and see if that doesn't help with the short stroke issue? If it does, you will be able to narrow the field of what the issue is down a bit.
Here is what I would try before sending it back to sig:
1) clean the barrel out (MPRO-7 gun cleaner) with rod/brush, make sure the gas port in the barrel isn't clogged
2) run a bore snake through the barrel a few times with Frog Lube liquid on the brush and near the end of the tail
3) pull the buffer spring/buffer out of the tube, wipe the tube out and put some Frog Lube paste in there, on the spring and the buffer
4) put Frog Lube paste (a good amount) on the BCG and cycle it back and fourth through the upper. Pull it back out, wipe it clean and then put a TINY amount back onto the contact points
5) pull the gas valve and piston/spring assemble out of the rifle. Make sure the ports on the valve are CLEAN and not clogged up. After cleaning it to the point it looks brand new, add Frog Lube paste to the spring on the piston. Then with a q-tip add a little of the paste to the hole (area the piston comes through the upper receiver) in the upper for the piston
After that is all done
1) head to the range and run some 7.62x51 NATO ammunition through the rifle (not .308 Winchester, 7.62x51 runs at a significantly higher pressure than .308 Win) on the NORMAL gas setting.
2) if it is short stroking on the NORMAL gas setting, switch it to ADVERSE and try again
If it is managing to fire and cycle properly and only have a couple FTF/FTE issues per magazine, continue to shoot the rifle to help break it in more.
If the rifle runs on adverse, I would run several magazines (minimum of 100rds) through it to help wear the contact points in. After that I would retry running the rifle on the NORMAL setting and see if it works any better than your first two trips to the range.
Things to note:
* The rifle is chambered in 7.62x51, so it might not like anything besides the higher pressure ammunition. If you haven't run 7.62x51 through it, do so before going any further.
* Try running the rifle on adverse gas setting
* Either you, or your gunsmith should polish the chamber to a very smooth finish which will help with extraction and help with short strokes (SIG does this to rifles that go in for short stroking from what I've read)
* Along with the chamber, polish all contact points on the bolt carrier, along with the locking lugs on the bolt
PS: If the rifle runs in ADVERSE mode with 7.62x51 without any issue and you cannot get it to run properly in NORMAL mode no matter what you do... consider having your gunsmith open up the hole on the valve for the NORMAL mode to allow a little more gas to go through the gun. Check for function after every time you open it up a tiny bit further. That said, I wouldn't go to this step until you have run at least 500 rounds of 7.62x51 (not .308) ammunition through the rifle yourself and broken things in a bit more. Even more would be better, but I realize its kind of expensive in the currently climate.
Good luck with your 716, and don't let this experience turn you off from SIG. I've owned several SIG products over the past few years, and I've never had 1 issue with any of them. You will read more bad things about products on the internet than you will about good (because people that are ****** generally are more inclined to spend the time to rant about their issue) so don't think that all 716 or 516 rifles are **** just because you read more of those threads than ones like I just posted talking about how I've run 735rds of .223 and 5.56 through my 516 without a single issue at all.