I have the same problem and line6 support seems to have no idea about this issue. Too bad because I really can't be sure if I have to return USB interface only or the guitar too. And it is really a problem, since the dealer is located 2000km away (how about $200 for a return shipping?)!
Why do I think it is interface or guitar problem? I tried:
1. Swapping USB cables
2. Swapping Cat5 cables
3. Swapping PC (another OS version, another usb port)
4. Using powered USB hub (bad idea, snhirsch, really - it made strings and cable jack energized)
5. Reflashing many times
6. Using POD HD500 as an USB interface
And after 5 and 6 I still have questions. There were a couple of times when I've managed to upload changes to the guitar (fw 1.9) via USB interface, but most of the time it failed. There was an error while I was trying to upload a change for the first time via HD500, but then it worked. I actually not quite sure about how well does it work with a HD500 compared to an USB interface, because my testing with the HD500 was rather brief (in a store), and it still worked some times with the supplied USB interface. Anyway no testing I was able to make with another USB interface and fw 2.0, that leaves me in doubt about actual problem cause.