We spent a few days on this, thought I would share the solution. We were working on a Kyocera 5500i with a DF-790 finisher (with center - folding) option. After folding 11x17 paper, about 30% of the time the lead edge would have a dent or small tear about 22 mm from the edge of the paper (from the rear side of the machine). It turned out there is a roller shaft in the paper transport near the bottom of the finisher that was the problem. The roller on the shaft towards the rear of the machine was not getting much drive, as the supporting metal is very thin and flimsy. This stalling roller has little rubber arms sticking out, so when the paper hit an arm, and it wasn't turning, hence the dent. Please see the attached picture of one of the rollers (it is actually the roller closest to the front of the machine, not the problem one) to see what I mean. The green arrow is pointing out one of the rubber arms. Hope this helps someone out.
I forgot to mention, that to fix the problem we removed the center folder from the finisher and straightened/ re-formed the metal. Thanks.