help with character controller crouching

Answer from my comments :

The best resource for crouching and running with the Character Controller : http://answers.unity3d.com/questions/164638/how-to-make-the-fps-character-controller-run-and-c.html

While GetComponent is now running faster, you really should store a reference to the controller at start (instead of every frame while S is pressed or released)

---

Find and store a reference to the Character Controller at Start, instead of in the input conditionals :

 var controller : CharacterController;
 
 function Start()
 {
     controller = GetComponent(CharacterController);
 }
 
 function DoStuff()
 {
     if (Input.GetKey("s"))
     {
         crouching = true;
         
         controller.height = 1.5;
     }
     else if (Input.GetKeyUp("s"))
     {
         crouching = false;
         
         controller.height = 2.0;
     }
 }

The problem you're having is when the collider is scaled up, it needs to be raised up by half the scaleY value. So the collider is not penetrating the collider below it when it is scaled up. Check the link in my first comment, answer by Aldo, Edited 2.

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This is the line that is doing all the work, to raise the character controller up when it is scaled up, keeping the collider above the collider it is standing on :

 tr.position.y += ( ch.height - lastHeight ) / 2; // fix vertical position

You should also look at how the scale is lerped rather than being instantly changed.

---

I have stripped out the parts you want, and renamed some of the variables :

 #pragma strict
 
 private var ch : CharacterController;
 private var startHeight : float; // initial height
 
 function Start() 
 {
     ch = GetComponent(CharacterController);
     startHeight = ch.height;
 }
 
 function Update() 
 {
     var newH : float = startHeight; // new height variable
     
     // press C to crouch
     if ( Input.GetKey("c") )
     { 
         // calculate new height
         newH = 0.5 * startHeight;
     }
     
     // crouch/stand up smoothly
     var lastHeight = ch.height; 
     
     // lerp CharacterController height
     ch.height = Mathf.Lerp( ch.height, newH, 5.0 * Time.deltaTime );
     
     // fix vertical position
     transform.position.y += ( ch.height - lastHeight ) * 0.5; 
 }

Here is the process :

new height = start height

if crouching, new height = start height * 0.5

last height is the current character controller height

lerp the character controller height between the current height and the new height (crouch/stand smoothly)

add to the position Y : the current lerped height - the height before lerping, divided by 2

so if the character grows 0.1 in height, add 0.05 to the position Y

or if the character shrinks by 0.1 in height, minus 0.05 to the position Y