Might want to keep bumping this topic til we get a response from someone at Line 6 saying they have recreated the problem and are working on it, this happened to me and it seems dangereous and in need of a quick fix - I had headphones on and it was so loud it felt like someone punching me in the eardrums, and I am imagining blowing out speakers in a PA or guitar amp if this happened in a live or rehearsal or recording situation tho it might just overload the mixer or something. In any case it can not be good, if someone's Pod did this on my sound system or through my amp I would unplug it for them and never let them plug it in again.

Hmmmmmm... as I recall my Vetta II did this the first time I used it at a show. the issue was the knobs were made of cast metal and they were too heavy (Line 6 had already changed the design when this happened to me when I asked them about the problem they sent me a set of the newer lightweight plastic knobs for free) , at high volume the knobs were vibrating causing multiple parameters to change at once, I wonder if I accidentally bumped one of my Pod's controllers last night while I was tweaking another...?

Details: I was connected to HD500 via UBB to a laptop running Windows XP Pro SPIII, HD Edit and Variax 500 via VDI at the time, don't remember which specific parameter I was tweaking, as I recall I was turning a knob on the Pod and not making the changes on the computer in Edit, had my headphones on with the master volume on the HD500 set pretty low (below halfway) and the sound suddenly changed to a full blast BWAWAWAWAWAWAWAWAWAWAWAWWWAWAWAWAWWAW that sounded like a burglar alarm or possibly a flying saucer landing.

I noticed when I am tweaking tones I am auditioning and there is already a different tone saved to that location the saved tones sometimes come blasting through when I change which tone I am working on.

Example: last night I downloaded Meambobbo's newly tweaked high gain setlist (some really great tones in there Meambobbo!) and opened it in a setlist that was already full of my regular patches. I was going through the patches one by one changing the inputs to Variax and selecting the guitar model on the Variax to call up for each patch. After loading the setlist in Edit I was doing 99% of the tweaking on the Pod itself but was still connected to Edit. I noticed that the Variax model kept changing even though Meambobbo's tones were all set to "Don't Force" and realized they were changing to whatever I had programmed in that location previously, for example if my old patch 4D used Res 4 Banjo, when I turned the selecter on the Pod to 4D in Meabbo's temporarily installed and as yet unsaved setlist the Variax changed to Res 4 Banjo until I changed the Pod setting from "Don't Force" to whatever model I wanted to use on the Meam patch or until I turned the model knob or 5 way switch on my Variax to select a different tone.

This happened each time that circled arrow "Syncing" graphic appeared on the Pod's display, also I could hear my previously saved tones each time the Pod was syncing, usually at a  volume greatly different than the Meambombbo patch I was working on at the time.

My crazy uneducated guess is the Pod is trying to access both  my original saved patch and the one I am auditioning at the same time and all that effort is blowing the poor machine's little mind

No fear, Line 6 will sort it all out.

I am going to try a workaround by not adjusting anything on the Pod when connected to Edit and see if it solves the problem, I have noticed the Pod seems to prefer being tweaked this way in the past.

Has everyone

-  Installed the latest drivers?

-  Done the Global Settings Reset after the firmware upgrade (important!) ( http://line6.com/support/docs/DOC-2222 ) (Johnayyyy ... I know you have )?

-  Using the latest version of HD Edit?

If you wanted to hang onto your own presets you should have backed-them up using HD Edit before upgradeing everything, overwritten the presets when you installed the firmware then restored the patches using HD Edit.  This process should have cleaned up the patches affected by th e'Squealing' problem.

If you didn't do the backup/restore process then can I suggest that you might want to try the following now:

1. Backup all patches using the latest version of HD Edit (use 'Save Bundle As')
2. Use Monkey to flash the firmware.  This time, choose to overwrite all presets when it prompts you to.
3. Do the Global Settings Reset as per the link above (and recalibrate the expression pedal)
4. Restore the patches using HD Edit.

In principle:  this should 'sanitise' your own presets.  Beware though, ones that were effected by the squealing problem may not restore correctly.  There are other threads that discuss this.

If the squealie/dropout problems persist after that then there may be a deeper problem.