Well, I don't know what I can tell you Urchin. As a Jug driver and lover of .50 cals, I think each hit sprite is a round hitting. That's just what I THINK, and I have no inside knowledge. All I've got is a lot of experience and a decent knowledge of networking and computers in general. Only HT could give you a definative answer here, but I'd bet I'm correct.
Now as far as this particular case, there are a few things you need to take into consideration. Not saying any of these were "the problem" in this case, but one or a combination of these things could have caused what you saw.
1. You were firing both cannon and MG's. This means you have no way of knowing how many of those flashes were cannon hits, indeed if any were. The hit flashes look the same either way. You can easily be hitting with only MG's. In the LW birds especially, this would be the case unless you were exactly at 1G and the target was at your convergence point. Dispersion means there is some spread of course, but it's quite possible, and even likely to hit only with MG's when firing both in the German iron, especially if you are pulling more than 1 G.
2. If you get un-lucky and spread your hits around, most planes can take a lot more damage than if you concentrated it in one place.
That said, I think in this case it is likey the next point.
3. Computers on the Internet are not a consistent medium. Lets say for a moment that for some reason a router someplace was dumping packets at odd times. Also there is the possibility of rubber bullets on occasion due to issues on your end. Lets say there was an asynchronous routing issue so that packets were getting TO you fine (positional updates of the other guy, etc.) while the damage packets you were sending to the server were not getting through. Or maybe you have a new video driver with V-synch disabled that is not "seeing" damage packets. All kinds of possible explanations here.
The bottom line is that in the entirety of my experience, AH models gunnery very well, and I see no evidence of a problem. Yep, there are exceptions, I've seen some weird toejam occasionally. Nature of the computer/Internet beast. But these strange happenings are in my experience, the exception by a large margin, not the rule. Such events are pretty damn rare for me, and tend to occur during times of general Intenet problems such as we have seen in recent weeks. HTC builds a product to work around and deal with these problems remarkably well, but they can't control everything.
Now if you thing there is something wrong, a bug or defect causing weird behavior, the best thing is to get a buddy and test it online in the TA. Oh... and try firing cannons only and see if you don't see less of those times when it seems like he'll never die.