I have to say I want to help. But I know nothing of the Physique modifier and I refuse to animated with a biped (its a horrible rig in my opinion. I can build easier ones myself). I did try, I looked at the Physique and went
Might I suggest an alternative path?
You can build a custom rig using bone objects and IK joints and use the skin modifier. Then if you have any pinching you can always use the skin deform. If you put a snapshot up of your character I maybe able to help see the best route to take. I've found most of the time when students have a difficult time with 3DS is because they've taken a difficult and buggy path to accomplish things.