Is is possible to have an 11-SP block broken down into 6/2/3 blocks, move the 6-SP to another hex and leave the 2-SP and 3-SP blocks?
Yes--see 1) Moving blocks below.
What the rules are trying to stop is a situation where I have a 20sp block in one hex, then I make change into a 1sp block and an 19 sp block. The 19 sp block moves two hexes, then breaks down into an 18 sp block and 1 sp block. The 18 sp block moves two hexes,...[and so on]
1) Moving blocks
7.2.1 Breaking Down Blocks: Prior to any movement, larger blocks may be broken down into smaller blocks; i.e., a block with 8 SPs may be returned to the Force Pool and replaced by any number of blocks with a sum total of 8 SPs. The new blocks may then move to different hexes or some may move and others stay. Deception blocks (zero SPs) may enter play as part of this process but may not move from the hex during this step....
1) Exceeding Stacking
6.2.3 Stacking Limit: Each hex has a stacking limit of three blocks. This limit may be temporarily exceeded during steps 2-4 of an Action Phase (Block Movement to Breakout Combat). Once Breakout Movement is resolved, each hex must be reduced to three blocks. A player is permitted to use his Force Pool or blocks in play to “make change” provided the total SPs in a hex does not change.
3) Consolidation (also 7.2.1)
The Active player may at any time consolidate blocks in one hex so that others are made available in the Force Pool. For example, a hex containing three 4-SP infantry blocks may be consolidated into one 12-SP infantry block. The three 4-SP infantry blocks return to the Force Pool and may be used to break down blocks in other hexes. Infantry and Cavalry blocks may never be interchanged during this process.
4) Breakout Movement (I assume breakout movement after Trench Warfare also allows breakdown)
7.4.1 Breakout Movement before Trench Warfare: During a Breakout Move, cavalry may advance two hexes, infantry blocks one hex. Otherwise, Breakout Movement follows all of the rules of Block Movement (7.2).
Does that mean you can only "make change" with your blocks before movement and then with Strat Reorg you can only rotate your blocks?
Well you can break down during breakout movement before trench warfare (and I assume after trench warfare), can consolidate whenever, and you can break down during retreat (10.1)
...When retreating, the Passive player has the option to break down blocks following the rules of 7.2.1. All retreating blocks must move to the same hex.
As for breakdowns during Strategic Reorganization I have done it while I have played, but there is nothing explicit saying it is allowed. Now you are making me double guess myself. On the other hand, some things that may (or may not) suggest breakdowns are also allowed are mentioned in 8.0 and 8.1:
Transferring SPs does not have to mean physically moving blocks (though you can).
The amount of SPs that may be moved in this phase is not governed by a fixed number. The amount able to move will vary based on the situation in the game. Factors include Supply Lines, the length of the frontline, blocks available in the Force Pool, etc.
Deception blocks may be moved in this phase and may replace a block to meet the previous rule.
The previous rule was about maintaining at least one block in a frontline hex that began the phase with one or more blocks.