SD, this link explains more stuff about yogurt using raw milk and more tips:
http://www.uga.edu/nchfp/publications/nchfp/factsheets/yogurt.html
I cook my yogurt longer in the slow cooker, around 5 hours or even longer for 3 qts of store milk. The longer that initial cook time, the thicker the yogurt will be. There have been plenty of times that I have drained some of the whey out to make a thicker, less tangy yogurt.
I really disliked the yogurt when I added the gelatin. It had a weird, almost slick, shiny texture that just really bugged me. I have used dry milk a few times, but don't anymore. If it's not thick enough, I drain the whey.
One time I stirred a pot of milk on low heat on the stove for 2 hours, trying to get it to 180!! A lot of it evaporated, but that was the absolute best yogurt I ever made.
The only times I have had lumps was when the starter had some lumps. It was a new container of Dannon...if I didn't live out in BF Egypt, I would have taken it back. But it worked okay..and every batch I made after that using homemade starter had the same little cottage cheese type lumps. Tasted like cream cheese, but just wasn't smooth. I finally just ate it all and got a new container at the grocery store.