Another update. I decided to go through logitech this time for replacement. They do ship out the replacement before you ship your back. I plan to test it rigorously before sending mine in. This is it though, after this I am going to just return the unit. This level of quality is unacceptable...

Regarding L2 Logitech support, they were very helpful, replacement no problem. But I didn't get the call back in 2 days as promised so I called them about 8 days or so after the promised callback.

Hopefully unit #3 is good.