,,,Xi has corruption problems. You can read this several ways. One, that he is eliminating rivals. Or two, these guys are corrupt and worse, inefficient and even worse, causing Xi to lose face within the CCP.

AGREED. I would only add that corruption is inherent in all levels of the system. How can you "lose face" within a corrupt body like the CCP, where everyone takes a bite? When the common people themselves notice. Only then might the CCP members take action. Are the common people beginning to notice? Maybe! I think this phenomenon is under-reported due to CCP and fellow traveler censorship.

... the CCP experts at ISW seem to believe that few know how the upper echelons of the CCP really work... very nuanced and very Oriental in that in every conversation there are two going on. 

One [problem] is the words that are being spoken and their meaning. Then, there is the other, that is more nuanced and could be the total opposite of what is being said, but more likely, in a different direction. The real/important conversation is the latter so unless one is in the room listening to the tone, tenor and words, it is hard to interpret the meaning. 

AGREED. Maybe more than two conversations, but the potential for cross cultural misunderstanding may be even worse than you describe. At NPS I helped two Taiwanese students finish their graduate theses.  Despite high intelligence, hard work, and their "fluency" in English, our shared academic and professional experiences gave me the insight to perceive when they sometimes wrote the opposite of what they had intended to communicate. It took long hours and lots of good faith conversation to sort it out.

Problem two is that the CCP understands us better than we understand them. Everything that comes out is carefully contrived/constructed/controlled to send a specific message. Again, there are two. One is the words and the other is something different.

AGREED. The Chinese may understand us better than we understand them (with the exception of Frank Dikotter* at Hoover), but they still do not understand us, and I am not 100% certain that ANYONE truly understands Trump.

Last point….  Xi is 72 and in a country where senior citizens are revered for their knowledge and wisdom, 72 is young. However, Xi has made some statements, i.e., that Taiwan will be returned to China in his lifetime….  Or words to that effect. The question is how since the majority of Taiwanese do not want to become citizens of the PRC just like the majority of those living in Hong Kong preferred to stay part of the British Commonwealth.

AGREED: The other side of the "age 72" coin might be the extreme disrespect Xi exhibited in unceremoniously dismissing so many respected elders, including Hu Jintao, who is now 82. Did that create a backlash in the minds of central committee members, or even the common folk?

Studying the PRC, one must realize the one thing that any CCP leader cannot do is put the hegemony/control by the CCP of the Chinese people at risk. That’s the fastest way to get ousted. 

TOTALLY AGREED! That's one reason we cannot tell what the perceived internal chaos might really mean.

...under Xi you have:

1. An economy in tatters. ... AGREED. 
2. Widespread corruption ... if it creates unrest, that’s bad. AGREED, but recent unrest has been under-reported.
3. An economy that is heavily dependent on exports. ... AGREED. This may be our greatest advantage, but I am not sure how far we are actually going to push it. 
4. The PRC says it is spending 2% on Defense. That’s BS. ...defense expenditures are way out of whack with what is sustainable... AGREED. CCP statistics have historically been even more inherently unreliable than our own, but since the pandemic, their stats - when published at all - have been simply fallacious.
5. A realization that a trade war with the U.S. is unwinnable. ... Any war with the U.S. will immediately put the PRC in conflict with [allied economies] as strong or stronger [than their own economy]... cut the PRC off from the world’s financial markets and its growing (and restless) middle class from their money in western banks. AGREED. The only questions in my mind is whether our allies, Trump - and more importantly the American people -  have the temerity and patience to push this advantage, and how the Chinese middle class will react. Will they blame the CCP?