Trying to troubleshoot a problem with my new Variax.

First, details about my gear:

• James Tyler Variax JTV-59 (Brand new)
• Plugged into POD XT Live via a brand new Variax cable

Here's what's happening:

1. When I push the model selector knob down to begin used the guitar's modeled sounds, I only get two sounds per selection (instead of five). The 3 position selector switch does nothing, but the push switch on the Alt Tuning knob does work. I can fiddle with the 3 position switch all I want, and there's no difference in sound.
2. When I push the model selector knob down again to turn off the modeled sounds, then the 3 position selector switch begins working. But as soon as I press the model selector switch again, it stops working.
3. Next, I unplug the variax cable from the guitar body. Then I plug in a regular guitar cord into the 1/4" jack on the guitar body.
4. At this point, with the model knob unpressed, the 3 position switch works. As soon as I turn on the modeling by pressing in the knob, no more 3 position switch (so I can't select all the models).
5. Finally, I try pulling out the battery and putting it back in, as this worked for me a day or so ago. No dice.

Any ideas what could be causing this? How can I fix this?