Character Controller Falls through Mesh Collider ground and objects in 3.1

We have several projects that were started in Unity 2.1 and 2.6 that uses the Character Controller moving avatars and enemies over Mesh Collider ground and objects, all work well. Since updating to 3.1, if any are touching or slightly penetrating the ground or object, they fall right through. To compensate. I have moved all of their start location up .005 to .01 on the y-axis. That works for some, however doing a moveto a specific location to on an object with a mesh collider, it falls through again.

What changed with the Physics or Character Controller to cause this issue and how can we get around it.

the objects with the mesh colliders are convex I assume? Otherwise they are not allowed to move technically ...

U3 updated PhysX to 2.8.x from the old 2.6.x version in U2

If they don't move its not so much of a problem. But should they move they would always mess collision.

To me it seems like the CharacterController in U3 generally works a bit different (and less buggy) but as a consequence of finally working correct you fall through the ground if you don't enter a collision anymore (ie when you are in the ground already you can't collide with the ground to stand ontop of it). To avoid this penetration issue you can simply do a very short range ray cast or sphere cast to find out the first position where its no longer below ground