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I just found this Thread after deadling with this all morning in my AAR.  John is flat wrong:

1.  Every bomber is set to Naval Strike, 10% Naval Search.  None - zero - are now or have ever been set above 10%.

2.  My bombers are, of course, flying Naval Strike missions (though not as often as I'd like, and not often against the "big targets").  One raid, for instance, tangle with a Division of his carriers and knocked out 70 of 105 CAP fighters.  Many other strikes have gone against merchant ships, plus effective strikes against BBs Hyuga and Hiei and a CVE.  By no means is the damage limited to Naval Search bombers.

3. Due to losing so much of his CAP, John has pulled his carriers back and left his transports essentially unguarded.  He has hundreds of lightly guarded transports ships within a few hexes of 500 Allied aircraft.  Of these, perhaps 300 are 4EB of high experience (averaging probably 85%).  What exactly does he expect from this situation?

As to the contention which seems to be bandied about here that CAP can't interfere with the naval search --- that's just wrong.
 
The stronger your CAP the fewer strikes you are going to see and the more of the searching planes you are going to knock down. IN one game when I was attacking PH an opponent put all his planes on naval search with my CVs 1 hex from PH. He was hoping to get lots of "free hits" a la what John alleges.
 
Instead he got a single hit on a single CV and another on an AK and lost over 100 planes in 2 days to my CAP. So, I think that proves conclusively that CAP DOES intercept naval search missions and if the CAP is strong enough it will not only chase them away before they can get many hits but will shoot down a large number of them also.
 
 
Sorry guys but making house rules is no solution to poor play. Use the correct countermeasure and you won't have to legislate this sort of thing out of existence.

I agree with Nemo.  I try to use my 4E's as they were used historically and I think it works well and has roughly believeable results, though I understand maybe the game is a bit generous with hits.  I do not use my large bomb groups as naval search mechanisms, though I do often put them on 10% naval search.  The bomb groups are used to smother specific targets.  I often use the smaller 12 or 16 plane squadrons as naval search units.  I do get hits on transports from these naval search aircraft, but not an unreasonable number (my opponent may disagree [:D]),but I also lose some of these planes now and again when, I assume, they fly over CAP'd hexes.  I know this because they will show up as a2a losses in the aircraft losses menu on days when no strikes went out. 

I might also add that it goes both ways. My opponent has lately been putting his Helen's on naval search and is getting hits on spotted ships. He's losing more than a few aircraft with this because most of my shipping is sitting at high CAP'd bases.