Ah, I see. Thanks for the help. Yeah In *my* case Ill probably keep using my workaround but I think others can take a look at this. Can I quote you for a tutorial Im writing on this bakedphys script method?

"Are you trying to create bodygroups?"
No, I'm trying to get each mesh to export in a way so each mesh has its own node. When I export there is only 1 node/bone object. Heres a pic:
http://the303.org/imaeg/smd_nodes_export.png
On the left is what the SMD I need should look like with all meshnodes (this example I could only create by exporting out of fragmotion from FBX from blender -that hacky thing I am doing in the meantime). On the right is what SMD exporting right out of blender BST does, as you can see it writes all meshes to skin to 1 node.

If you need, Ive packed up my blend file with all sources and in the "fragmotion" folder is the fully compiled working models GoldSrc & Source engine models from that fragmotion export:
http://the303.org/stuff/baked_physics_blend.rar

When I tried exporting the group but everything was skinned to only on 1 node object in the SMD (need wall, brick1,2,3,ect). Also in group exportable list I couldn't export the animation sequence it seemed, only mesh.

I want to know how (or request an option if not possible currently) to export separate unrigged meshes as nodes in one SMD just like in 3ds exporting. Currently the only way ive found is a painful process of creating a bone for each piece with a constraint.

Now I have found a hacky workaround to get Baked blender physics sim into Source or GoldSrc models: I exported my simulaton as an ASCII 6.0FBX with "animation optimization" turned off and then imported into another modelling program called fragMOTION which at some point turned all these loose meshes into node objects. It also kept the heiarchy that i parented in blender for the meshes, but now they have nodes.

Having to skip the export to another program would save a buch of steps and other software needed. Also, here is how my current method is done:
http://the303.org/imaeg/blender_wallphys.jpg

I too support this; ive tested several models and this is one of the best things that can help improve the importer.

You know how texture/material assigning works correct? also you must have .bmp in the material name too. Example at top of this image: http://www.the303.org/tutorials/goldbrightimages/glo08.jpg

With GoldSrc there seems to be a certain case where sometimes when I export I get a jumbled mess of verticies like this: http://the303.org/imaeg/blend_error.jpg (bottom is fixed) and I found the cause can be sometimes a vert will be wieghted to multiple bones and get by the "multiple weights" export error that stops the export.

EDIT: this is also what the faulty error SMD looks like with multiple node links in the front
http://the303.org/imaeg/multiple_smdblend.PNG

Now ive found the only way to really make sure that verticies are thresholded is to use "Limit Total" to 1 & "Quantize" to 1 in weight paint (however sometimes this can be iffy), but I suggest the best way of solving this is to have an automatic threshold applied on GoldSrcc exports. Just like in the same design as "DMX weight link cull threshold" slider you have for source export.

Could be a number of things. What are you using to decompile? I suspect something is going wrong with the UV's. What are you using to compile as well?

Is there any existing python scripts that do automatic bone creation + armature assign?

Is there some kind of script or future option to automatically assign bone/armature to unrigged meshes on export? I say this because the only method ive found to export baked physics animations is this very lengthy and convoluted method:
https://www.youtube.com/watch?v=sVrGnKnjJf4

In 3DS it was quite simple since I believe the exporter would take any separate unrigged mesh and automatically assign a bone to it with the same name as the mesh (at its origin) and skin it during the export process so exporting a scene with baked physics with MassFx was quick and didnt require any extra steps.