Yeah I see now the IR receiver and buttons/encoder go to the same PIC. We had checked the reset pin previously, and it is just a resistor to 5 volts I believe.

Update:
We found the problem. It was a bad solder joint at pin 2 of the PIC near the buttons. Although it showed continuity to the IRRX line, the signal was not reaching the PIN reliably. After a quick touch up of the solder joint, control seems 100% again. Apparently the slight pressure of the probe was enough to establish continuity were none was without the probe. Tony, it would be great if you could add this to the FAQ.

Thanks,
Stu