I'm having difficulty's with my DM4. It wont turn on. Not even the light. The Input and Output are both plugged in and the Line 6 PX-2g Power Adapter is plugged in too. All though I do get the clean guitar sound when the DM4 is hooked up to my guitar and amp, just the distortion effect will not come on. I've tried plugging and unplugging, taking out the C batteries, I even tried this other un-used PX-2g Power Adapter that I had recently bought for my DL4 Delay to see if it was the adapter that was causing the problem but the DM4 still wouldn't come on. Its worked just fine until now. I've only had it for 3 weeks. Does having the C batteries in the Modeler while the PX-2g Adapter hooked up through out this whole time have any effect to it? I don't know at this point.
You should try to refrain from having both batteries and external power supply connected; it's recommended to use one or the other.
At this point, I'd have to defer to an actual repair tech to open up the unit for physical diagnosis of which internal hardware component is failing on your DM4: http://line6.com/service_centers/