This seems to work... (your LastProp, in this context, was superflous)

Update Kind of works, but I realized it allows continuation lines before a prop

use strict;
use Parse::RecDescent;

$::TestGrammar = <<'TG';

Output: PropLine(s) /\Z/

PropLine: CommentLine | SimpleProp | ContinuationLine

CommentLine: /\#.*\n/ { print "RULE: $item{__RULE__}\n";
                        print "MATCH: $item{__PATTERN1__}\n";
                    }

SimpleProp: VAR EQ VAL { print "RULE: $item{__RULE__}\n";
                         print "VAR: $item{VAR}\n";
                         print "EQ: $item{EQ}\n";
                         print "VAL: $item{VAL}\n\n"; }


VAR: /^[^=\n]+/

EQ: '='

VAL: /.+/

ContinuationLine: VAL { print "RULE: $item{__RULE__}\n";
                        print "VAL: $item{VAL}\n\n"; }

TG

    undef $/;
my $foo = <DATA>;

my $parser = Parse::RecDescent->new($::TestGrammar);

defined $parser->Output($foo) or die "FAILURE";

__DATA__
# Comment Line
# Comment #2
foo=this is property
one but
bar=does it grab this one too?
baz=snark
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