This doesn't make sense, but I bought a K&N drop in filter for my xD (new - 1600 mi. so far) thinking I'd get a few more HP and better gas mileage since the engine could breath a bit easier, but the opposite has happened. I was getting 32-33 in mixed city/hgy driving, and the average MPG has actually dropped a few miles per gallon. to 30-31.

Does this sound right? Or is something else going on?

 

your engine tries to maintain a optimum ratio of air tha fuel, to prevent running lean or running rich.

the more air your intake sucks up, the more air volume detected by the MAF sensor, there for it has to add more fuel to the mixture to prevent detonation. this creates alittle more power, but in general, more power means fewer mpg.