This is a common problem. I haven't heard of anyone who fixed it yet however I did get a response from Harmony tech support. Here are the directions I got from Harmony tech support to fix this issue. I haven't tried it and the battery removal/insertion part is a bit ambiguous.
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Sorry to hear that you are having problems with your Harmony Remote. Please follow the steps below to update the firmware of your Harmony Remote in Save Mode
1) Power on your Computer
2) Take out the batteries of the Harmony Remote
3) Hold down the OFF button on your Harmony before connecting it, then connected to the USB cable but keep the OFF button pressed down
4) The Harmony will power up and it will say on the LCD “Save mode requested”
5) Login to your Harmony Home Page (
http://users.harmonyremote.com)
6) Click on “Support”
7) On the Download section click on Firmware
8) Follow the steps on the page to update your firmware, our system will say that you have the latest firmware but you can still update it again. The difference is that we are u[dating the firmware in save mode
9) After downloading the firmware again to the Harmony Remote you will have to do an Update to your Harmony Remote to download your configuration
10) When you get back on the Home Page click on “Update My Remote”
Note: If the above does not fix your problem please contact us for more troubleshooting steps.
Note: Make sure you disable all Internet security (Antivirus, Firewalls and Pop-up blockers) before entering your Harmony Account to avoid connectivity problems.
If you require any additional assistance, please contact our Support team, or visit our FAQ’s located on your Harmony member homepage, and clicking “Support”
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Let us know if that works for you.