My palm muting is appalling, inconsistent and I lack stamina which I'm starting to think is due to how I hold the pick, I use jazz 3 picks which are small and quite thick and really want to keep using these but I find I need to loosen my hold on the pick when palm muting (like Metallica stuff), is this normal? bad practice? If I grip too tight I'm almost catching on the strings too much. But holding too loose I feel like I'm losing some of the chugging type noises when muting and not hitting strings hard enough.

You should never grip your pick too hard. I used to have that problem and my arm would get very tired from straining everything to play fast palm muting riffs. You should be fairly loose and comfortable, but not so loose that you loose grip.

I use the same picks and I think the key (for me at least) is that I hold my picks very close to the tip so that very little is actually sticking out. I started doing this at first because it made it easier to pull off those quick pinch harmonics, but it really helped with fast down stroke palm muting and also fast tremolo picking.
Tight enough to not let it slip out and loose enough so you're not causing tension.
once I learned to use my palm instead of my pinky as an anchor while palm muting my speed and precision really improved. I keep my middle, ring, and pinky fingers extended with my palm on the strings. At that point its all in the wrist... Not sure if thats what you're doing or not... just my 2 cents.