Riggly,
You say that the soil loss is from the vertical face and yet the soils are fairly dry. What is the composition of the soil lossed is it predominantly fines or is it similiar to the backfill material? What is the age of your retaining stucture? Would you consider facing the structure as PEinc has suggested? Does the backslope fill material over-top or lie below the horizontal timbers? If below then perhaps surface water could be infiltrating the soils at the face of the crib wall and exiting via the weakest link. You did mention that you thought there were surface water issues, perhaps the installation of a diversion ditch above the wall would help reduce the soil loss. I have installed these behind walls with "infinite" slopes of 1.5H to 1.0V.
When you say moderate to severe soil loss...how large are the voids?
If a replacement structure is being cosidered for the entire sructure,some structure types (other than crib walls)to consider are a soil nail wall (unless your fills behind the crib wall are consolidating then I would be concerned about applying a bending force to the nails)and maybe a soldier pile wall - which may blend well, aesthetically, into the existing timber crib wall. Both are cut-wall applications rather than fill walls, but research the benefits to your site.