Keith,
I remember chatting with Jesse Decker (I think it was him) on the boards here more than a year ago and at the time I mentioned that I thought Dragon could get a lot more advertisers if they updated their audit with the Audit Bureau of Circulations. Checking on SRDS online, it seems that you still haven't updated it.
Also, just curious if your ad sales people try to get any non-endemic advertisers into the magazine? While the overall circulation is not that high, I would expect that the pass-along readership is probably in the 3-4 range. And, younger males (18-34, which I imagine is your core audience) are a traditionally tough group to reach with standard media. A pretty big portion of your audience I would imagine have a decent discretionary income because they can afford to support their hobby. I saw someone on the ENWorld boards a few weeks ago claim to spend $100/month on RPG material. With a little research and perhaps a subscriber study, I bet you could make a case of going after some bigger, non-game advertisers. More movie releases and DVD sales (I've seen a few already, if I remember correctly) and perhaps things like electronics? That seems like a big untapped category for you.
While this won't necessarily improve the content of the magazine, editorial-wise, it would bring in more money that you could use to add more pages to the book, keep costs down, and hire more editorial staff.
Just some thougths.