I had the same problem...targets 2 and 3 kept dropping on solid hits to target 1 or just wouldn't reset properly. This is because the little ledge on the target that holds the target up isn't resting as fully as it should on the metal assembly frame after it's resets. If you don't understand, you'll see what I mean when you remove the assembly. My directions make it sound way worse than it actually is.

You will need to pull the drop target assembly off the underside of the playfield (4 screws and 2 plugs). It's a pretty simple assembly but has a bunch of small parts. You'll notice two rods going thru the targets that run the width of the assembly (1 upper and 1 lower) and that each drop target has 2 washers/spacers on the front side of each target on the upper rod. One thin washer and 1 thick. You will need to remove the upper rod by removing some e-clips and a screw. Then remove the thin washer on the top, front side of the target giving you problems and reassemble. You won't have to remove the bottom rod but may need to remove the lower e-clip on target 1 to make things easier if you choose to remove the thin washer on target 1.

Make note of how the washers, springs and e-clips are ordered in relation to each target. The top should be in this order from the front of the assembly to the back: thin washer (this is the one to remove), thick washer, target, thin washer, spring, thick washer and e-clip. The bottom is thin washer, thick washer, target and then e-clip.

When reassembling, you may find it easier to put the screw for the upper rod into the assembly first, place the washer(s) over that screw and align the rod with the screw and tighten slightly to hold it together.

This will solve your problems. I removed the thin washer front the top, front side of each target and the game played flawlessly all night, dropping only on true hit.