Are you flying with live weather? With high altitude comes strong winds. If they are tail it's all good. If they are head... I've noticed significant drops in TAS with head winds above 30kts. It seems the sweet spot for the C414 is FL200/220.

For my data gathering flights, I always switch to calm weather, and delete the wind layer(s) to ensure no wind or turbulance at all. Theoretically a head/tailwind should make no difference in TAS, unless there are wind gusts, which will slow you down a bit as it slows you down and it takes a little while to catch back up. Like I said, I try to minimize the externalities for my data collection flights. If you want I can send you the data table I collected for this airplane, maybe you can spot-check a few of my measurements to make sure I'm on the same page.

My bad, I meant GS not TAS (sorry, late night). As for TAS, the initial headwind (when it appears) and gusts as you say will change the TAS momentarily but in the positive way. It is an addition of air flowing from the front to the back of the aircraft and it will increase the TAS (TAS + headwind). The other, and most important effect, is that it's going to reduce GS (GS - headwind). After a while, yes, TAS will go down and stabilize back to initial speed (before the headwind appeared) but GS will remain impacted by a constant headwind. At the end, GS is what matters since it will determine how long we need to reach our destination. Hence, flying high is the best way to have a shorter flight. Except when headwinds are too strong... I've encountered 70 to 85kts constant headwinds instead of 50/60kts expected (live weather) at FL250 between Iceland and Greenland (BIRK-BGSF). Needless to say that GS was severely reduced.

I tested the combination you indicated: FL120 17mp @2300rpm with 50% fuel with 680LB payload and I have a fuel flow of 102LB/H and TAS of 133. Same result. We may not have the same FL/TAS results (I guess) due to different fuel amount (not unlimited and 100% at take off in my case) and payload. With my combination of fuel and payload when reaching 12000ft and setting at 17mp 2300rpm after a few minutes my TAS is only 126.

That makes sense - you should be getting the same consumption rate, and the lower TAS is because you are heavier. I never fly with unlimited fuel normally, but I do for these data flights, which I also fly with maximum time compression just so speeds settle quickly.

There are a number of airplanes in MSFS that suffer from the same issue - a lack of significant difference in performance at different altitudes. The DA62 was the only one I remember having a significant difference - it was definitely better the higher you go. I think it's a simulator issue, similar to the drag issue some planes have at high altitude, like the JustFlight BAe146.

Forgot to mention, yes, same fuel flow: 102lb/h TAS 126

Just out of interest I did the same test with the A320. Most efficient flight altitude is FL200 (the lowest altitude I tested). That's just not right. Asobo please fix the flight model!

Altitude       Mach       TAS       FuelCons       Theoretical Range   20000          0.78       479         2968                3785   22000          0.78       475         2965                3757   24000          0.78       471         2950                3744   26000          0.78       467         2940                3725   28000          0.78       464         2947                3692   30000          0.78       459         2955                3642   32000          0.78       456         2960                3613   34000          0.78       452         2985                3551   36000          0.78       447         3036                3453   38000          0.78       447         3099                3382   40000          0.78       447         3220                3255   42000          0.78       447         3320                3157

What would it be with the Concorde or the Darkstar... :-)