If you log your military flights in your civilian logbook and properly annotate it with remarks, etc. you can easily explain the difference between your "official" military forms and your logbook.
I use an electronic logbook called Logbook Pro. Before getting hired at Hawaiian and during my long furlough, I was very meticulous about logging (unlike now where I put one entry for the month based on the company tracked flight times). Logbook Pro has columns for block out, takeoff, land and block in times. It automatically does the math and with a couple of mouse clicks, you can easily have it compute your total time either civilian or military style.
If you use a paper logbook, you can always make a separate columns - TT/Military and TT/civilian. Put in both figures and annotate out/off/on/in times in the remarks. When the interviewer asks "Why are you showing 2000 hours in the space shuttle yet the Navy says you only have 1600?" you can answer "The TT/military is based on off/on times and matches my military log. Since civilian aviation logs out/in block time, that is shown in the TT/civilian column. I listed the TT/civilian figure on my resume as that follows the logging conventions of the airlines. Both my TT figures are derived from the out/off/on/in times listed in the remarks." I got this in January 2002 straight from the Southwest People Department (Lindsey Lang) when she came to my 737 type rating course to discuss the SWA hiring process and how to make yourself more competitive (the type rating school has a very close relationship with SWA). She said that while SWA does allow a conversion factor (+ 0.3 hours per flight), they would prefer actual numbers when available.
Further, if the airline you are applying for does not allow a conversion factor, then you are making yourself less competitive. There are the minimums to apply for the job, the minimums to actually get the interview, and the minimums that make you competitive to get hired. Your military time might meet the minimums to apply or interview, but not be competitive for actually getting the job. A lot of airlines use a point system for hiring with everything (interview, sim test, hours, psych test, etc) all getting a value. Your 1500 civilian logged time for your 1200 military hours might get a better value and make your overall score better. If you have logged your military time in a civilian log with appropriate remarks to justify your TT entry, you can legitimately list the higher figure and be more competitive.
If you are applying for a corporate job, many of their flight hour requirements are insurance company driven. They are going to have a lot better insurance rates if they can put on the their insurance form that you have 1500 hours instead of 1200 hours. Insurance companies are known for asking for copies of logbooks and flight records. The brokers do not understand military flight time, especially first pilot versus second pilot versus special crew. If it is too hard, corporate flight departments won't look at you. They want easy. One logbook is easy.
The problems is when there is no consistency and someone tries to start logging it this way half-way through a military career. They apply the conversion factor to those flights prior to making this decision and use actual times after. Then eyebrows are raised and questions asked. That is why I actually advocate either logging your military time in your civilian logbook from day one or not doing it at all.
Having said all this, of all the interviews I did working my way to Hawaiian and while on furlough, the only places that did any in depth logbook checks during the interview were Scenic and SWA. I went to every interview expecting one and prepared for one, but these were it. Both airlines would not just throw you out of the interview but rather ask you why/how you came to a figure. If you could reasonably defend it, then they were happy.
Both the airlines and FAA also known that logging flight time is a "self-certifying" paperwork drill. They have no real way of verifying/proving the vast majority of the time in a logbook. That is why they accept reasonable explanations during logbook reviews. It is very obvious to them if a pilot is being truthful/reasonable or trying to inflate his experience.
I have formed my logging opinion based on many interviews both corporate and airline, many airline hiring discussions with former military pilots now at majors, advice given many friends by airline interview prep courses/counselors, and talking to guys that sit on interview/hiring committees.