I had SOMEHOW (likely user error) messed up the gears in my Domino 500, and that was the cause of my three broken 5mm bits. The larger bits were ok, but the cutting was obviously rough. I went through the whole deal of trying different feeding speeds, being sure I had the machine held correctly, always had a dust extractor on, and so on... On the advice of a nice gentleman on the Festool Roadshow truck, I sent it in for inspection. It came back repaired and cutting smoothly - no charge, even though it was significantly out of warranty...
Pg 8 of the supplemental manual: "Rotate the (mortice width) dial ONLY when the motor is running." To me, that is counter-intuitive (and I believe the opposite is true for the Domino 700) - so I'm pretty sure I did that, not having noticed the prohibition. It might be worth sending the Domino 500 in for a checkup. Mine now works, I think, better than new. I found it frustrating to use early-on, and probably damaged the gears in there pretty early. After repair, it's the tool I expected it to be.