What's odd is that the chain doesn't fall onto the teeth. As if the teeth are too wide or the chain too narrow.
Sorry I can't help you further, as my experience with mixing 7/8/9/10 spd equipment is limited, and I won't get more insight until I finish one of my builds mixing 8 spd chain and cassette, with 9/10 spd derailleurs and crankset.
Thanks for the help that you could give though!
I sent the crank back to performance for an exchange for a new one and I ordered a new 08 veloce FD.
I think that should solve it, if not, then I'm going to look for the cable end that cracked a little when I was installing the cables. Though I'm not sure that was for the FD.