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Mine are always sorted correctly on my PRS-350s and it looks like you covered everything correctly, but I'll go over my settings.
Under Sending books to device, I have the following in the dropdown template box:
{author_sort}/{title} - {authors}
Under Plugins, scroll down to the "Sony Device Interface (1.0.0) by Kovid Goyal, Communicate with Sony eBook readers older than the PRST1", double click it to bring up the options and these are my settings:
Use subdirectories is checked (probably not important for your issue)
Use author sort for author is checked (this one probably is very important)
Save template is: {title} - {authors}
Collection box: series, tags
Below that only preserve cover aspect ratio is unchecked.
For the metadata for each book, authors are listed as FN LN, but when moved to the Author sort box, they come up as LN, FN without any additional input from me.
For my Metadata plugboard, I have the following under the Title option, but this doesn't do anything with the author names at all, it's just adding the series info onto the title. The format option is device_db, and the device is PRS505:
{title} {series_index:|[|]} {series}
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