Tie has no settings; just an esp and text file.
I thought the whole purpose of your mod was the dropping off.

If I use the gameplay slider it affects everything making it too easy
in some cases, although even at 30% it seems armor is shredded too much, too fast for simple creatures.
I just wish I could find where that helm dropped. I could at least get some cash off of it. Maybe it went through a wall. I don't have
disintegrate turned on.
Basically I was expecting armor to last longer than this vs normal combat (no magic, etc).
I may have to turn it off at low levels as it costs too much to get new armor and / or repair it at this rate with the possible interactions
with other mods.
Heh, you're not the first to think the reason for this mod is the armor dropping off! That's turned out to be a much more popular feature than I thought it would. (Maybe because, for the moment, it's the only mod I'm aware of that offers that.) But in truth the armor/weapon dropping was a late addition to the mod; the enchantment scaling, and the automatic equipping of a new weapon when your current one breaks/is disarmed, was the reason I built BEAR. It just never made sense to me that a Cuirass that was about to break had just as strong an enchantment as when it was brand new.
From your description, I would suggest that you just turn the Armor Dropping off for the time being. TIE is ripping through your armor way too quickly--the armor dropping is actually LESS immersive in your game. With Armor Dropping off, the armor is unequipped to inventory instead. (Or you can turn both Dropping and Unequipping off if you want.)
I can't help you much with that helmet I'm afraid! All I can say is that, as you know Oblivion's collision detection can be somewhat buggy inside buildings. When an item falls through a floor or wall, Oblivion is supposed to put it back at the entrance to the cell, but it doesn't always for reasons unbeknownst to me. So I'd check around each door as well in the area where it dropped. And if you can't find it, I could at least tell you how to add its worth in gold to your character.