Forgot to post my solution. I did the software update but kept having the problem. I read somwhere else about removing the black paint from the 4 bolts that hold the case together. I replaced them instead for unpainted bolts and finally the problem was solved. It seems that the black bolts (painted) do some sort of electric interference to the firmware. Line 6 techs should look deeper into this ERROR an fix it for future batches of the M5.
Good luck fergie2209