Tom, I had the same problem with my Sorcerer. It would hunt and hold altitude  - most of the time.  A happy day when it went in the trash. I redid my panel a few years ago with 3 axis Garmin servos, mode control panel and G3X touch. It's as solid as a rock and I couldn't be happier with it.

I also had a Trutrak in my ES.  However, I found my biggest problem was that the control head was mounted on an angled portion of my panel.  I did not realize that the unit contained gyros.  So being mounted 30˚ off centerline really gave it fits.  However, I went Garmin G3X for everything which works better now. You will have some calibration flights that need to be done upon installation of a new digital system.

I have owned a number of planes with the S-TEC autopilots, including an S-TEC system 50 in my Lancair IVP.  Most S-TEC autopilots use a brushed DC servo motor.  Over time, the brushes and mating commutator wear and cause excessive resistance in the motor.  This will manifest as hunting in the pitch and roll axes. This can be verified by checking the start voltage of the offending axis's servo.  Using a variable voltage DC power supply monitored by a voltmeter, apply nearly zero volts to the servo, usually contacts 3 and 4 on the 9 contact D-sub servo connector.  Slowly increase the power supply voltage to no more than 12 volts while observing the first motion of the servo.  Note the voltage that voltmeter reads when the servo first starts to move.  This is called the start voltage.  The lower this voltage, the better. I vaguely recall the threshold for deciding if a servo is serviceable is a start voltage of about 1 or 1.5 volts.  The S-TEC factory can confirm this number.  Last I checked, S-TEC servo repair is about $800.  Given the prospective plane is experimental, you can replace the motor yourself for about $30 and a few hours labor.  In some cases, the start voltage can be lowered by running the servo at full voltage (12 or 24, as indicated on the servo data plate) in each direction for minute or so.

If the servo start voltage is below the acceptable threshold and the autopilot still hunts, some adjustment is possible by changing the gain resistors in the Pitch Flight Computer and Roll Flight Computer.  S-TEC may provide the diagrams and instructions for changing these resistors, at least they have in the past for me.  The S-TEC 55X was never originally manufactured in a variant that was specific for the flight characteristics of a Lancair ES, so the gain resistors probably need changed.  Call me for more info 541-727-2162...Jeff.