Propecia doesn't block DHT directly - it blocks 5-alpha-reductase-2 and (indirectly) 5-beta-reductase. 5-alpha-reductase-2 is part of the process that converts testosterone to DHT so by inhibiting 5-alpha-reductase-2 you decrease the levels of DHT in your blood by up to 70% depending on which study you quote. HOWEVER, many side effects are not related to THAT particular process. Just like DHT is not just in your body to cause hair loss, 5-alpha-reductase also is not just there to create DHT.
In fact, 5-alpha-reductase plays a part in several other processes in the brain, e.g. affecting the hypothalamus and the Pituitary gland among other areas of the brain. Some of the Propecia side effects such as depression, insomnia, anxiety attacks and speech impairment might result from that.
Many people who suffer from irreversible side effects from finasteride / Propecia have low to normal Test and low to normal DHT. finasteride / Propecia does something in your body that we still do not understand and that's the dangerous part about it.
edit: some more on that.
From the Journal of Sexual Medicine (July 2011)
"... The 5 alpha reductase enzyme ALSO metabolizes progesterone to 5 alpha-dihydroprogesterone and deoxycorticosterone to 5 alpha-dihydrodeoxycorticosterone. And in the brain, the products of 5 alpha reductase inhibitors are transformed by another group of specific enzymes known as 3 alpha-hydroxysteroid dehydrogenases, which reduces 5 alpha-dihydrotestosterone to 3 alpha, 5 alpha-androstane 17b-diol (3a-diol), and 5 alpha-dihydroprogesterone to 3 alpha, 5 alpha-tetrahydroprogesterone (allopregnanolone). Similarly, 5 alpha-dihydrodeoxycorticosterone is further reduced to 3 alpha, 5 alpha-tetrahydrodeoxycorticosterone. " [THDOC]
"Theoretically, these important neurosteroid derivatives are UNNECESSARILY LOWERED (collateral damage) by 5 alpha reductase inhibitors for hair loss. These reduced important neurosteroid derivatives are thought to function in the central nervous system with important physiological functions including modulation of gamma aminobutyric acid type A receptor, sigma receptor function, nicotinic acetylcholine receptor, voltage gated calcium channels, and synaptic and brain plasticity.
"To translate into clinical terms, these physiological functions may impact mood, rhythm, stress, sleep, memory, anxiety, and sexual function."
From: Pharmacology Biochemistry and Behavior (2005)
"These results indicate that 5alpha-R2 acts in brain sexual differentiation of male rats. Moreover, we suggest that 5alpha-R2 not only produces essential metabolites that act together with estradiol in brain sexual differentiation but also protects the brain from the damaging effects of estradiol excess."
This basically implies that 5AR2 inhibitors like Finasteride adversely affect your brain's health.