The pressure is going to drop especially on a 10 gallon compressor as that's not very big .I can't really say I have ever watched the gauge on my compressor though .Seems pretty normal to me to see the drop your seeing though .It doesn't sound to me like anythings wrong with your regulator it sounds to me like you need a bigger compressor . I would want the filter before the regulator to keep any trash , rust or water out of the regulator as well .