I do not have fragmotion, so I cannot determine if that is part of the problem. The speed change in the FPE file could effect the stride of the animation as the game is thinking 25 fps and you may be thinking 10fps. If a walk stride at 100 scale and 100 speed is 3 feet. and you slow the speed down and keep the scale it will appear as the character moon walking.
When scaleing in your model program on a skinned boned mesh, you should only have to scale the meshes base bone to get the rest of it to scale. This is usually something you will want to make sure is done before animation along with any welding of verticies and UV mapping.
The best stride animation are between 25 frames and 30 frames and small adjustments in scale and speed dont effect them as much.
If you want to zip or rar the model and the _d2 texture Xfile and FPE file. I can look at it and see whats going on. You could export the model out as a milkshape file .MS3D I believe and send me that file. I will open it in max and take a look. then run it through a test in the engine.
Make the email subject say FPSC or something so my email does not throw it in junk mail.
Hope this helps
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