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IMHO the Koni Sport (yellows) have too much rebound damping, even on the softest setting. The Bilstein (who is the OE supplier, FWIW) should be softer. Are you sure you have the B4 and not the B6?
I'll second stepping down on wheel diameter. Not sure you're going to be able to have your cake and eat it too with damping changes alone.
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