In it's current form, the Transmutation specialty for Alchemy is a terrible joke. I specced Transmutation when TBC was first released, and I can literally count the procs I have experienced on my own two hands. Countless threads have been posted on the WoW Professions Forum since the specialty's conception, complaining of dismally-low proc rates. They are so few and far between, infact, that I can't even remember the last time I actually experienced one. What is it that makes them so rare? The poor math Blizzard used to dictate a "chance" proc occurance together with the Philosopher Stone, which is limited by it's own set of internal cooldowns. These limitations are inherent to any Alchemist performing transmutes, specialized or not. But it is the Transmute Master that is affected most, far beyond even what the quality of transmuted items should require. Thankfully, after all this time, Blizzard is finally fessing up to the matter, and is looking into making things right... sort of.
Blizzard Blue Pavonum has admitted that Transmutations are experiencing proc issues, but qualifies them as only occurring since the implementation of Patch 2.3. Personally, I have yet to experience even a single proc since Patch 2.3 landed, but I had no expectation of seeing one for quite some time, since they were so rare to begin with. Being that is the case, I find it hard to believe that this is a new-patch issue and think that Bliz being a little less than honest about the matter. But hey, at least they're finally getting around to acknowledging it and working on a fix. And no matter when it becomes available, at least we Alchemists can immediately find comfort in the fact that new there was something wrong, and that we weren't going mad after all. =)