I shake my inserts/nappies out before hanging them up. I know that sounds weird but it seems to help to shake 'em before they dry. It straightens them out before they dry but they're not stiff when dry. I hope that makes sense!

Are you using a really small amount of powder? I only use about a quarter or less of the scoop per full wash. I've used different powders and haven't noticed any difference between them. HTH.