My FAL (Rhodesian parts kit with coonan R1 upper) only functions when I have the gas set on the lowest setting. Everything else causes it to partially extract or not at all on like 3 or 4. Gas setting 1 makes it work alright but it still doesn't throw the casings very far. I was shooting brass cased clean FNM 7.62 (Portuguese) ammo so I don't think it's an ammo problem. I had to replace the gas tube on this FAL last year since the other one's threads were messed up. This gas tube seems to fit well, but I am considering putting lithium tape on the threads to prevent gas from exiting there. Besides that I am unsure what to try. Anyone have any recommendations?

You're undergassed, but you knew that.
First check is to see if there's a mechanical misalignment in the gas system:
Does the piston rod drag on the receiver or the inside of the gas tube? A sharpie will tell you if it's dragging, and where.
Check the straightness of the rod itself by rolling it across a known flat surface, like a pane of glass.  
Is the gas port properly aligned with the gas block? Since yours is a metric rifle, you can remove the front sight and fixing plate, and look through the hole thus revealed. It's harder with an Inch pattern gas block, since it has to be done by feel.

Assuming all is well there, a leak at the gas tube is likely. Is the pin present? Although your tube is "new", is it straight with unbuggered threads? The Teflon tape will help if your leak is there, especially if the gas tube is a bit "wobbly" in the gas block.  

As a last resort, you can open up the gas port. Factory gas port diameter is 0.092" to 0.094". You can go up to 0.125" (1/8"), but I would be hesitant to take that further. I have had to do that on a Century-built FAL on a Hesse receiver, but it was the last step after replacing the other gas system parts. FWIW, that particular FAL has since run reliably with the gas regulator set to the middle range on everything I've fed it.

Thank you for the info! I will try doing some tinkering with it and see if I can find the gas leak. The parts kit is pretty worn since those rhodie guns got used hard

If you're getting a leak where the tube meets the FSB, it's best to high-temp solder it in place, and cut it shorter (to allow disassembly). That was the standard FN repair for leaks there. No more threads to worry about.

When I had issues with mine (STG58 kit) I found the gas port on the barrel had some build up of carbon on the walls.  The first drill bit just knocked black crud into the barrel.  I went ahead and opened it up a little bit (don't remember the diameter of the drill bit, it's been a few years) since it had a shortened barrel with a compensator welded to the end to get it to the legal length.  After opening mine up it would operate on the lowest gas setting just fine, rather than almost the last gas setting and then need to be adjusted when you got up around 200 rounds through it.  Then again every 50 rounds or so.

Good luck with yours.

check to see if your barrel is bent. mine would  not cycle even when i opened the hole.  after much playing arould with it i figured out the barrel was bent. this caused the gas tube to be to one side causing it to drag

Was the barrel actually bent or just canted and out-of-time?

bent. when it was perfectly timed it was bent to the left. this caused the gas tube to be left also causing binding and shooting right.   i need a new barrel to make it right

A new barrel or someone very skilled at straightening barrels. Arizona Response systems might have something you could use.

yeah i contacted him about barrel stragithening as i would like to keep the barrel as it matches the lower.  he said its not worth it and he tried before with no success

Those were actually two separate thoughts. Apologies for any confusion. He- Mark at ARS- has/had a bunch of refinished surplus barrels for very reasonable prices. I got an excellent South African for an R1 build for $125 shipped. As for straightening, I know that there are folks that specialize in that, but, like Mark said, it may not be worth it, especially given how easy it is to swap an FAL barrel.

i have been looking for the list that had the barrels and can't find it anymore .  wonder if they are all sold  out

Only has a couple 21s left rest are 17.3
http://www.falfiles.com/forums/showthread.php?t=418529

thanks. i wonder how well the ones with pitting in the barrel would shoot . i don't need a tack driver , just mil accuracy

One would probably not notice a degradation in practical accuracy. That's my guess, and it's worth exactly what you paid for it.