Well if it works fine in tray 2 position it must be ok tray wise, i know that spring clutch is a pain for tray 1, #2 is easier to get at but of course 1 usually fails first. That spring clutch would be my only other thought besides a faulty paper end sensor or push switch. You could try swapping the paper end sensors from one and two around and test it, they get faulty and will cause paper out during feeding.
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