Curious Gladius/Typhoon Problem

I have a recently acquired Typhoon H2X2. I also recently acquired a set of Tenergy 3v rechargeable 123's for it. Everything was fine and I was quite happy until last night when I lost the lowest mode. For those that don't know the UI, there is a click on setting that allows you to adjust the brightness up or down by holding the switch. Mine is set to come on in the lowest, moonlight setting and then ramp upward when holding the switch. Now it does not light immediately as usual, but if I hold the switch to ramp it up, it eventually comes on at a higher setting as though the system is still working only without light at the lowest setting. The other two settings, full and strobe work fine. This is the same with the rechargeables or primaries. My guess is that whatever regulates the lower setting is shot. I was wondering if the battery regulation in the rechargeable 3v's was allowing too much voltage to reach the system before regulation and caused the failure.

Any ideas? I'm about to contact Insight about the problem.