I set the time per question in the quant section to 2.5 mins...
Did you check afterwards to make sure that your total time did not go over 75 minutes? If you actually spend 2.5m for every Q, you will go well over 75 minutes. The drawback of setting the timer that way is that it no longer times you for the overall section - so you may spend more than 75m, which is not allowed on the real test.
Unfortunately luck wasn't on my side with this one and most of my guesses were infact incorrect
How much time have you spent learning how to make good guesses? Good guessing is actually a skill - it has to be learned just like all of the other skills you need for the test. :)
My theory in Verbal is: >> I am doing well, i.e. on track to score 36-39 if I get 1 RC in Questions 1 to 10. Second RC in Questions 10 to 20. Third and Fourth RC's before question 32.
The passages aren't given based upon your score or how well you're doing - they can come earlier or later.
I make a string of errors in b/w questions 18-29... >> It's like I get 3-4 wrong on the trot... >> I feel the anticipation of a Hard RC just makes me panic and I end up answering the questions incorrectly
That may be part of it, and it may also be the case that you have a stamina problem. It's not unusual to have an energy "slump" during the verbal section; for you, it seems that this is consistently happening in the middle of the verbal section.
You're taking your breaks, right? Are you having something to eat and drink on your break between quant and verbal? Make sure it's something that gives you lasting energy - protein, complex carbs, and a little fat. Do a little physical activity too - stretch, walk around, etc.
Next, on the mental issue of getting messed up because you're anticipating a hard RC - you may or may not get a hard RC. If you don't get a hard one, then you don't need to worry. If you do... that's actually good! It means you're doing really well if you get a hard RC! So that's not something to worry about either.
If you get a really hard RC and you're worried it might slow you down, do two things: just skim over the part of the passage that is the absolute hardest - don't spend a ton of time figuring it out - and then possibly just bail if you get a question about that hard detail. One question will not kill your score. If you know you can do that, then you don't have to stress about possibly getting a hard passage.
Okay, so you're still working on timing - keep it up. On quant, go back to doing the whole 75m as one big chunk next time and see if you can keep it up (and, of course, keep practicing cutting yourself off, and spend time learning HOW to improve your odds when guessing). On verbal, we've got to fix the problem that caused you to finish super-early. As you saw, you lost points simply because you were going too quickly - that caused you to make some careless mistakes.
And I just read your 2nd post - the verbal timing is getting worse. We've got to fix that or your score will stay where it is or even drop further. My best advice to you at this point is to postpone your test if at all possible. Finishing the section 20 minutes early is indicative of a significant timing problem and that's hard to fix in a week.
Can you postpone?