Originally Posted by tdmjk

The hanger alignment is fine. I also tried a different rear wheel with a different cassette but there was no improvement there either.

I did, however, notice that the inner metal strands of the gear cable casing seem to protrude further than the outer plastic layer. They aren't frayed but are probably sticking out by a couple of mm. They were definitely flush at both ends when I cut and fitted them so is it possible that the inner metal strands have somehow slipped between the inner plastic liner and the outer plastic casing of the cable housing?

If the shifting problems can be explained by a compressing cable housing, which makes sense since after a few downshifts the indexing is fine (presumably because the cable housing has fully compressed) then I guess these protruding metal ends would explain it?