I agree with PeterH that the sampling rate should be higher. But then you say 10ft accuracy is all your after so who knows.
If you have a look at the Aeroquad code you'll see getting decent altitude hold isn't as simple as taking readings from the baro sensor. They run the sampling rate at something like 50Hz, filter the readings, adjust with temperature compensation, and combine the baro with accelerometer readings. Maybe you're already doing this in your code? It's hard to tell from the pseudocode you posted.