First, I set the panic threshold back from 1.5 to 1.2 (0.9 being the original). Second, I toned down the boni at peace to about 70% of what they're now. Third, during war time I give more boni, so perhaps in the next test I'm getting farther in 1941, but not to Moscow.
By the way, I'm leaving Germany with only 300 MP from start as well, so a monster buildup is not possible in this scenario. I'm granting Germany a 0.2 free MP per day from Barbarossa to BP or 1945, whatever comes earlier. That should make up for some of the losses in a years long frontal standstill.
These changes (especially the panic threshold toning down) appear to be well balanced. On the next test (playing goes slowly) I'm optimistic to reach the Daugava/Dnepr line somewhere in September (it's August right now), but there is no way in hell I can reach Moscow in 1941. I probably come to a standstill somewhere between Smolensk and Moscow.
Note, that I'm playing with a near-historical setup (I have 3 "check points" - Fall Weiß, Fall Gelb and Barbarossa). If I would powerplay, I wouldn't have the problems I'm experiencing now. But I try to prevent powerplaying by cutting down German MP and draining IC by inflicting negative off-map supply flow, for which Germany gets some neat fluff (historical Kriegsmarine, garrison divisions in the historical places), which doesn't help at all but is, well, historical. I thought that's better than taking away IC with no return.
With the changed panic threshold, the SU had 23 less infantry divisions, but 7 more armored divisions (panic mode is very infantry-centric while land build mode is not) and a crapload of planes. Their build queue has 12 long series of infantry (about 3/4 of which are brigaded), 4 series of armor (model 1941) and 6 series of planes, mostly interceptors and CAS. The SU was in land build mode until Barbarossa, while it had been in full panic on my earlier game. Now, after the invasion, they're in panic mode, which gives them an average of 1 bonus division per week (1 per 2 weeks in land mode).
The AI acts pretty well tactically. It leaves gaps in the front (I bet not willingly, but it happens quite often), but if I dare to exploit them, they hit hard with huge stacks in the flanks, so unless I have a similar stack of healthy infantry ready to cover the province, my advancing armor would be lost for certain. The troop deployment in 3 echelons helps loads, the AI has no problems to assemble comfortable stacks even 2 provinces behind the front. Mind you, all this is DD/Arma, the AOD AI has been changed, whether for the better or worse I do not yet know.
My last notable operation was to advance over the Daugava into a seemingly empty province Riga with 7 divisions with ~80% org, just to suffer a pretty brutal counterattack of a stack of 18, which only had half of my org (the divisions I had pushed out of Riga were among them along with some reinforcements), but still won pretty quick (despite having slow combat with high defense and toughness). That's pretty much how I imagine the eastern campaign to go.
I won't be able to post more test results for a while, since I plan a trip to Russia myself in about a week. This time as peaceful tourist. And after I return, I bet Civ V will be occupying my time. When I'll play HoI2 again, I do not know.