Just worked through this exact same issue, but with reaper.
What got me mining at ~350 KH/s was changing the
gpu_thread_concurrency to
15000.
More or less copied settings for the 7870, and it worked.
There is no where I could find that had the 7860 settings filled in in a guide.
You can probably get more KH/s by working with the concurrency.
Solution was found in tacotime's post at
https://bitcointalksearch.org/topic/m.1256502.
I tried to set the gpu_thread_concurrency to 15000, but I get the following error message:
[2013-04-06 10:34:38] Started cgminer 2.11.3
[2013-04-06 10:34:38] Started cgminer 2.11.3
[2013-04-06 10:34:38] Loaded configuration file cgminer.conf
[2013-04-06 10:34:38] Probing for an alive pool
[2013-04-06 10:34:39] Stratum from pool 1 detected new block
[2013-04-06 10:34:39] Maximum buffer memory device 0 supports says 536870912
[2013-04-06 10:34:39] Your scrypt settings come to 1006632960
[2013-04-06 10:34:39] Error -61: clCreateBuffer (padbuffer8), decrease CT or in
crease LG
[2013-04-06 10:34:39] Failed to init GPU thread 0, disabling device 0
[2013-04-06 10:34:39] Restarting the GPU from the menu will not fix this.
[2013-04-06 10:34:39] Try restarting cgminer.
Press enter to continue: