My old Mark I and the new Mark III both ran fine at .04" and lower. I recall the manual saying the stove required a MINIMUM of .06" - they say that for liability reasons. .06" is more than enough.
As far as not burning through the night, could be a number of things. Coal quality, intensity of burn, possible air leaks around gaskets, or draft strength. Sounds like you've got plenty of draft there, so I'm gonna say at 2 turns out, your really cranking the fire hot. In these warm temps, even I don't have mine 2 turns out (all the regulars here know of my legendary icebox ... and swamp .. of a house). When you run it hot like that, the ashes eventually block all airflow to the fire .... or the coal just plain gets used up. I'd try one turn and see what happens. I never follow the manual - you have to experiment and find what works for your chimney and your comfort level.