My god... I can't believe there are still people who fight over loot distribution.
You say your players are veterans? Then why is this even an issue? Veterans, IMO, should be the least likely to fight over loot and the most likely to simply give items to whomever they're appropriate to.
I find a lot of issues like this have more to do with the group dynamics and the individuals involved than it does with any sort of system. Play with reasonable, intelligent adults and not children who will bicker over unimportant things that nobody in their right mind would care about.
This thread reminds me of WoW. The amount of times I've walked away from loot because of some whiny little turd who puts a priority on loot above friendships or relationships in game, I've lost count. In fact, I left my last guild because of two particular people who did just this. Ironically, they claimed I was being a loot whore, even though I'd passed up every bit of loot from 25 man raids for the last two months of regular raiding and was given loot priority by the GM *because* I kept passing loot to everyone else (who I felt needed it more than I did).