I have the same problem described in  http://line6.com/support/message/122084

Given workaround (downgrade to version 1.02) works, but looks like this is a typical hardware malfunction. I have no way to reach european or US service, but I'm capable to make some sort of repairing by myself. Would you please give me just a hint which part of a board is damaged. Don't let me throw out this exellent staff to the dump, together with belief in the Line 6, as in the manufacturer of the best guitar equipment.