Bread! again....

Your problem is very likely loaf formation.  It's something which bites a lot of beginners on the backside.  There are some other possibilities as well, and I'll try to address the mostly likely culprits.

You need to keep a lot of "surface tension" when you pull the dough down and form.  That way the loaf holds its shape and "springs" up in the oven, instead of falling into a flat, dense "slipper." 

After the last rise before formation, very gently form the dough into balls of loaf amount).  Try to lose as little air as possible.  Hold the ball in one hand, and use the other to pull the skin down from the top to the bottom, do this a few times all round the ball until the skin is very tight -- again, retaining as much air in the ball as possible.

Put the ball on the board, pat it gently into a (roughly) loaf shaped oblong; and transfer to your loaf pan.  Allow it to take its last rise before baking.  If you like, you can cover the loaf with saran wrap and let it rise overnight in the refrigerator (called a retarded rise), for more flavor and better oven spring.  Of course, you can take the last rise on the counter also.  You don't need a complete doubling, because you want some rise in the oven.  So instead of  a100% increase in volume, go for 75%.

Into a thoroughly preheated oven (at least 1/2 an hour, an hour is better).  Bake your bread, let it cool and let's see what you've got.

Then, let's take it from there.

BDL

PS.  It's probably not a big issue -- if an issue at all -- but KA bread flour is extremely hard and does best with long and vigorous machine kneading.  You might find AP flour a bit more friendly.

PPS.  I'd also like to know if your kneaded bread passes the window pane test.

BdL's advice is good.  I also have to say that's a lot of butter for 3 cups of flour, and a lot of sugar.  You actually need *any* of either ingredient.  I would scale them back until the bread is working for you, and then add to taste. 

I used to be just like you. I didn't understand baking, particularly the magic of bread. So, when I did bake a loaf I would slavishly follow the recipe. Sometimes I got a great bread. More often it was mediocre or poor. About three years ago I got seriously into bread making, and made an effort to understand both the art and the science of it. With the progress I've made I figure, gimme another 20 years or so and I'll call myself a baker.

Be that as it may, I learned much of what I know (and, keep in mind, I am still learning) from several books. I'll list them for you at the bottom of my post.

That said: I agree with both BDL and Colin. Given what you've said, the culprit is likely with loaf formation. However, for a loaf, I would increase the surface tension differently. Keep in mind that some things are not a right/wong difference; merely a difference between two rights.

1. As he indicated, and contrary to the frequent instructions that you  "punch down" the dough, try and degass as little as possible.

2. Gently form the dough into a rectangle with the long side slightly shorter than the length of the pan.

3. Fold the top third into the middle. Then fold the bottom third over the top---sort of like folding a letter. However, draw this second fold around to the bottom of the dough, stretching and tightening the surface. If necessary, pinch the seam to seal it.

Note: This is the same way you'd start several free-standing shapes, such as batards.

4. At this point the rolled dough will be longer than the loaf pan. Fold the edges under, equally from each end, so it will fit in the pan. Transfer to the pan, seam down, let rise, and bake.*

A note on rising: I disagree slightly with BDL on this. Yes, you do want some oven spring. But you also want the dough higher (about an inch) than the sides of the pan when you pop it into the oven.

*A note on pan preparation. Again, there are different strokes for different folks. The way I do it is to lightly butter or oil the pan. Then dust it with either semolina or corn flour. They release perfectly that way every time.

BDL's suggestion for retarding fermentation is a good one. Literally any bread benefits from such treatment. However, if you follow his directions, first spray the film with oil, then loosely cover the dough with it. Otherwise it will be the devils own work getting it off without messing up the formed loaf.

Suggested Reading:

The Bread Baker's Apprentice or Crust & Crumb, by Peter Reinhart. Both are good, but you don't need both. BBA is probably the better of them for a beginner.

Ultimate Bread, by Eric Treuille & Ursula Ferrigno. Good instructions and some very interesting recipes.

Artisan Breads, by Eric W. Kastel. Part of the CIA's At-Home series. The general information and instructional data is first rate. The formulae, unfortunately, leave something to be desired.

There are many others, and I learn from every bread book I read. But those four are, IMO, particularly worthwhile.

Your formula is very similar to Peter Rienhart's for simple white bread except he has 1 large egg in his, I actually use his formula all of the time for making bread using either a regular bread pan or pullman pan and I have been getting great results.

There are a few things that I do different however ...

1) I don't use a bread machine ... or mixer for that matter, I do however use a scale and at a minimum I weigh my flour, butter and sugar

2) I use warm water not hot (it's my understanding that hot water causes the gluten to tighten)

3) I put the yeast directly into the dry ingredients without proofing it and mix everything together before adding the liquid.

4) I don't use the grocery store packets of yeast ( you can order a 1lb. bag of yeast online keep it in an airtight container in the fridge or freezer and it keeps for a very long time and it's a lot cheaper).

5)I knead my simple white bread by hand ... if you could call it kneading, I have watched a million videos on how to do this and they never really made much sense ... why would I need to do all of that folding?

   Think of kneading dough as working out a knot in a sore muscle, so don't knead the dough massage it until it becomes smooth and you can't feel any lumps or "knots" if you will.

6) For shaping your dough for it's first proofing I just get it into a rough round ball and then on opposite sides of the "ball" I do a motion kind of like scooping up a double handful of water which causes the skin on the dough to tighten and after each "scoop" I give                the dough a slight turn and repeat until the skin is smooth and tight looking, then I oil a large bowl, put the dough in, oil the top of the dough and cover until it has at least doubled. I then do what you do I knock the dough down place it into my pan (making sure it's as    even as I can make it cover it and let it rise again)

7) Get an oven thermometer and an instant read thermometer (home ovens are notorious for being off, I know mine is way off whenever it's above about 400 degrees)

I read through your post about 6 times but I didn't see what temperature you are baking at and for how long ... when using a bread pan 350 is usually the magic number for about 20-30 minutes

Another thing to try is instead of using milk try using buttermilk.

Being able to stretch the dough enough that you can see light through it without it tearing is what the window pane test is so your spot on with that one ... AP stands for All Purpose

How long are you letting the bread machine "do it's thing"?

Just for grins and giggles try this

Put all of your dry ingredients into a large mixing bowl including yeast, get all of your wet ingredients to temperature, put it all together and mix by hand, once the dough is holding together fairly well flour your countertop so that the dough will not stick and knead it by hand until you get the consistency I mentioned in my earlier post (you will probably need to add more flour as you knead)   you want the dough to be tacky not sticky .. yeah I know it sounds wierd but basically you want it kinda like play dough it will cling to your hand but it will come off without leaving any behind

Put that into an oiled bowl and cover until it has doubled in volume .. don't really go by time if it's cold it will take a lot longer and in turn that will throw everything off

Without getting too deep into bakers percentages you should be getting enough dough for about a pound and a half of bread .... what size pan are you using?

If your using a standard 9x5 pan (I think that's the right size) it's a good chance your not letting your dough proof enough .. crowding the pan so to speak.

I just looked at your formula again ... is your dough fairly wet?

I use almost the exact same formula you do except I use 4 3/4 cups flour .. or actually I use 21.5 ounces of unbleached bread or all purpose flour plus bench flour when kneading and I get 2 one pound loaves or one pullman loaf .. I think it's around 13x4x4 or something.

Not sure if it's allowed to scan and post them here but I can scan and send you the pages with the formula that I use from Peter Rienhart's book The Bread Baker's Apprentice if you would like.

What you're doing (i.e., stretching the dough) is pretty much the windowpane test. It's merely a way of checking gluten development, and you seem to be ok there.

Highlander's method of tightening the skin on a ball is the more traditional way (as opposed to doing it all in your hands, as BDL suggests.) It's probably a little easier for beginners to do it on a board.

"Hot" is a relative term. Generally speaking, anything from 120F down is fine. After that there's a danger of killing the yeast. Temperature of the liquid should not effect the gluten; I don't know where you heard that. With milk, a few seconds in the microwave warms it nicely.

A comment on Peter Reinhart's recipe. The reason the yeast goes directly into the mixture is because it calls for instant yeast---which does not have to be bloomed. So you mix it with the other dry ingredients, then add your liquids, and, voila! Ready to go.

AP stands for all-purpose. We've had discussions about what various flours are, and how to best use them. You would probably benefit from doing a search and reading some of those threads. But, in brief, there are three common forms of white flour: pastry (or soft) flours; bread (or hard) flours; and all-purpose, which is a combination of those two. How a flour fits in a category has to do with it's protein content, and, for various reasons, there is some overlap. One example: Because southern wheat tends to be softer, it often happens that an AP flour has the same, or higher, protein content than southern-milled bread flour.

There are other nuances, as well. So it's a good idea, once you find a flour you're happy with, to stick with it. For instance, there's nothing wrong with King Arthur flour. I used it for a long time. But Weisenberger works better for me, so that's what I stick with. The fact that it's less expensive, and that the mill is only 40 minutes away, are just gravy.

BUTTER!  the butter should be added cold at the END of the kneading, when the gluten has already formed. 

Try it, it works.  In which case the larger quantity of butter will not be detrimental to the lightness of the dough, BUT WILL ACTUALLY MAKE IT LIGHTER. 

As I understand it (and I'm NOT a baking scientist but a very experienced home cook and made tons of light bread for years) the melted butter is absorbed by the flour and discourages rising and makes it all heavy, but after the gluten has formed in kneading, the flour doesn;t absorb it, esp if added in cold slivers, but it coats the gluten and the layers of gluten slide more easily over each otyehr, allowing a better rise. 

Anyway, try it, it really makes a difference.

Besides, not punching the dough, folding well, keeping the outer layer on top when rising and on ythe bottom when folding