Thanks to all for your comments. I did record the guitar into my DAW, Sonar. Ghost notes clearly still there. I will double check intonation when I get off of work ( well, I guess I am not 'working' since I am checking the Line 6 forum!!) Any idea why my Variax will not go into 'Factory default restore' mode?
Also: I went into Workbench. The ghost notes I hear sound exactly like a 12-string patch, with the second note a forth away from original note. Not much luck there, so far.