Don't overthink it. It is a process that takes time. As long as you are using a system that is aural (all recent systems are that I know of) it will come. Yes when you are learning the characters your brain will try to decompose the sounds, It is Ok to think, "did I hear dit-dit-dah-dit or dit-dah-dah-dit?" But it is not Ok to think, "Is that a dot-dot-dash-dot or a dot-dash-dash-dot?" The difference is that in the second example, your brain is converting the sound to visual images of dots and dashes, as you have no doubt seen in a code chart, and then into characters. You are using the visual portions of your brain instead of the aural portions of your brain. Thinking about dits and dahs is your brain trying to reconcile what it heard to what is stored away as aural patterns that represent characters. And this is fine. As you keep at it, your brain will start to do this more and more quickly until it becomes almost instantaneous.
I would not start out with the MorseMachine set to all 40 characters. Go back to the individual characters in the lessons part of the site and start with 2 to 4 characters. Play them and listen to them listening for the pattern. I like to say them to myself, "dit-dit-dah-dit, F" After a while you will no longer think, I just heard dit-dit-dah-dit," but rather, "I just heard an F." Then add to it. Once you have got the sounds of 4 or 5 characters burned into your brain, then go to the MorseMachine and use only those 4 characters for practice.
Don't give up. Just don't push yourself too fast until you have mastered the characters you have already learned.
I disagree with Tom on 2 things. One It is NOT all right to think dit dit dah dit. And two , I will have to disagree about using Morse Machine. On Morse Machine there are more than a few people that believe it is not good. I will stop on that point.
Back to dit dit dah dit. - I am NO EXPERT on cw or teaching it by any means either. But when I hear a letter I do NOT ever say it out in dit dit dah dit. I hear the sound and either process it or not. I know it in a instant . Try this next code practice. Hear the letter being sent and in a instant say it out loud. As soon as you hear it !
In fact I am working with QRQ software to hear random words at high speed and am working to know these random whole word sent . As well as calls . This is not any training I have done before. I find it very difficult right at the moment . At times I must slow the word down and spell it out in my head at 30 wpm or 20 . I find this frustrating but rewarding. Go to Fabian's site or QRQ and view the principal behind instant recognition of whole words. Using this software.
I find at 20 wpm or 40 wpm I have the same trouble to remember a full call. Before I type it. It takes me 1-5 times to hear a full call to fully> remember it, depending on the call < speed does not seem to matter. It is the same problem. I have poor to next to no short term memory. The fact is I can type a full call as it is being sent , BUT ! I have been instructed to try and stop this practice and hear the full call or full word then type it in . This takes memory and processing. I am instructed to try and build a buffer.
I understand the High Speed Call sign champions can remember 5 -10 calls before they even start to type. ( wow is all I say )
When I started my training I was lucky if I could remember the call 1 second after I heard it. Other words by the end of the call sent I forgot it all ready !
You understand this is not a issue at 10 wpm . It is when you get to higher speeds it is very difficult to write or type or think and not start to get lost in copy !
The process of decoding code in ones head by any other means than INSTANT RECOGNITION I believe will hold you back to slower qrs speeds.
I do not believe you will get to qrq copy by any such processing . You must hear the sound and know it as soon as you hear it.
In fact I could not ever figure out what dit dit dah dit was. First I got the key out and started sending code to my self . Then I said ah ! that is a F . Reason , I must hear the sound to understand the code sent. I can not see it nor can I deceiver it from written text. You know I had to look on the internet what dit dah dah dit was. I said it out loud for 1/2 min and still could not figure it out.
Rather you say dit Dah or Dot Dash in you mind makes no difference in my thinking.
Instant Recognition is simple : Your hear a F or a P and you know it in a instant from the sound.
If I am totally wrong will some one please in lighten me .