Reply to Is my S4 defective?

I bought a new S4 about 6 days ago and started noticing an issue with it in the last couple days.

My current setup is the S4 plugged into my Macbook Pro running the latest version of Lion. (Before it gets brought up, this isn't an issue with the USB cable but just to settle the issue for anyone doubting, I am using the cable that came with the S4).

As I am describing the issue below I will refer to two groups of controls:
Group A: All 8 knobs and 8 buttons for the two FX units
Group B: FX Unit 2 On buttons (by the gains) for channels A and C and the FX Unit 1 On buttons for channels B and D. (Note this doesn't include the other 4 FX unit on buttons, only specifically Unit 2 for channel A and C and Unit 1 for channel B and D)

Here is what happens:

1. Launch Traktor
2. Delete ALL controller mappings (so there is no S4 default or user mappings listed)
3. Connect my S4 to the power
4. Connect the USB to S4 and computer
5. Turn on the power switch on the S4
6. Traktor recognizes the new S4 and adds a default mapping
7. Attempt to use the knobs and buttons listed in both groups A and B above

Results: Group A (FX unit controls) are NOT working. Group B (FX unit on buttons) are working.

Continuing to debug the issue I try this...

1. Close Traktor
2. Leave the S4 plugged in and on
3. Launch Traktor
4. Attempt to use the knobs and buttons listed in both groups A and B above

Results: Group A (FX unit controls) are now working. Group B (FX unit on buttons) are no longer working. Note the behavior has now switched.

How about this...

1. Leave Traktor open after seeing the failure of the controls to work properly
2. Open the preferences window
3. Delete the S4 controller mapping
4. Manually add a new default S4 mapping
5. Attempt to use the knobs and buttons listed in both groups A and B above

Results: Same situation, only one of the two groups of controls work.

Trying one more thing....

1. Don't close Traktor after seeing the failure of the controls to work properly
2. Leave the S4 plugged in and on
3. Go into the preferences
4. Go the the Traktor Kontrol S4 section of the preferences
5. Click the "Restore" button under the Restore Default section
6. Attempt to use the knobs and buttons listed in both groups A and B above

Results: Everything works! yay,... right?.... no....

After this as soon as I close Traktor and relaunch it I am right back where I started and the same symptoms occur again.

I'm not sure what else to try. My Traktor install has worked flawlessly ever since Traktor Pro came out. I've used a pretty good array of controllers without issue including my pair of X1s and never had an issue before.

I don't know what else to do other than to return the device. Any help is appreciated.