The last I read was they were supposed to use the old LSA in the arctic, and CLP everywhere else. There's what's referred to as the "Gunny's Lube" which is a 50% mix of CLP and automatic transmission fluid which is reported to work very well in the sand. I think its not so much what you lubricate with in the sand, as it is to just lubricate. If you liberally apply 10w-40 motor oil you'll have very good results, and I imagine it would even work well in the arctic since 10w-40 is rated to something like -60 for automobiles.
You just want to be careful to keep the lubricant out of the chamber where it can make life unnecessarily exciting.
Try using Mobil 1 in 0W-20. It flows in the coldest weather, Run your gun VERY WET, (especially the bolt carrier group), and use a good, quality high end ammunition. I'm willing to bet your problems will disappear. Don't go by what soldiers in Iraq do or use. It has no bearing for civilians who shoot in the cold, wet woods of Oregon.
This is a good guide to follow when lubricating most direct impingement AR-15 platform weapons. In the case of most AR's, more lube is better than less. Simply because the direct impingement gas operation of the weapon tends to blow excess lubricant out the ejection port over a period of just a few rounds.
"L" means lightly lubricate. "1" means 1 drop. "G" means use a generous amount.
I'm going to admit up front I have little experience with the AR system in sand. Having said that, one of the things that has always puzzled me is that after 40+ years, lubrication of the system has so many variants flying about.
Whats worked for me since 1970 or so is lubrication almost per the drawing bilt included. Especially if using conventional oil based lubes, don't lube the firing pin, gas rings or the gas chamber area of the carrier as it will form carbon when exposed to combustion gases. I've used Mil-Tec, LSA and Dri-Slide with good results, I prefer the Dri-Slide. Now that I've got my own, I generally use a little dab of moly chassis lube on the cam pin area of the carrier and the rear of the bolt locking lugs. What you use seems to be less important than regularity.
The only thing that requires regular lube on the lower is the trigger mechanism. The rest of that stuff is an occasional thing, largely dependent upon weather.
BTW, in my experience "wet" shouldn't mean sopping, dripping lubricant.
My former employer bought oodles of the M&P15 and they work right along with the older Colts with a much better warranty.
1. never use graphite on anything, anytime, anywhere. It is erosive in dry atmosphere. Correction make that very erosive. Question: If graphite is such a great lubricant why is it used in brake shoes? Why do brakes fail after running through puddles? Because they are wet and wet graphite is nice and slick.
2. LSA is good to about ZERO
3. At Aberdeen Proving Ground the only lubricant that worked at 50 below zero was LAW Lubricant Arctic Weapons
I suspect Mobil 1 0W20 would work to around 40 below zero. Maybe some of the guys from Alaska can enlighten us on Mobil 1 below zero.
My personal lubes are Ed's Red, make it yourself. 1/3 Mercon Dexron Trans Fluid, 1/3 K1 Kerosene (I have used off road diesel), 1/3 mineral spirits or paint thinner.
The other is Mobil 1 and I have used 0W20, 0W30 and 5W20 with good results in ambient temps.
Insofar as the original problem goes tends to sound like a pitted chamber or a rust build up. I would not shoot steel case ammo but its your rifle.
Do you have access to another lower? If so try your upper on that lower and the other upper on yours.
Does it malfunction with white box commercial Federal?
Check for galling in the bolt carrier where the pin slides in the channel.
The M16 was tested to operate bone dry for 600 rounds at Aberdeen many times.
The reason steel case has problems in AR carbines comes down to gas port pressure and the fact that steel is less ductile than brass. Most full length AR rifles work much better with steel cases because the pressure on the case walls is 4-6kpsi lower than the carbine's short gas system.