The chief cause of low efficiency in batch sparging is undercrushing your grain. You should have a fair amount of flour without shredding your hulls too much. If your grains are merely cracked with no flour, you will get poor conversion.
The thing about efficiency dropping when you batch sparge is primarily theoretical. In theory a perfect fly sparge will give you higher efficiency than a perfect batch sparge. However, it is much easier to screw up a fly sparge than a batch sparge. On top of that, some mash systems work better for fly sparging and some work better for batch sparging. It's all a matter of tun geometry and manifold construction.
Again, the first place to look is your crush. Also review just how you are doing your batch sparge. If you haven't already, check out
http://hbd.org/cascade/dennybrew/
and
http://cruisenews.net/brewing/infusion/page1.php
This will give you 2 different views of the process and should help you a little.
Wayne
Bugeater Brewing Company