I have a similar problem. I looked for an option on my tv to switch how the source menu is handled, and could not find anything. I have a Samsung PN50C550G1F, and a Logitech Harmony 620. The tv displays a list style source menu when the source button is pressed, and both the down button and the source button will cycle through the source list. Both buttons cycle down, and the up button will cycle up.

To get to, say, HDMI1, it seems the remote doesn't just "go down one because it thinks it's on AV1 and HDMI is one below it". It seems like it searches for something and is never able to find it. Even if it does end up on HDMI1, it won't close the source list by pressing "enter", which leads me to believe that it didn't actually know it was going to HDMI1, but just happened to fall on it.

I can't think of anything else you should know, but if there is anything just let me know.

Thanks!