Is there really a softwarebased problem in Hi-Jack?

As far as I know, there is no software problem in Hijack. Unless you've deliberately set the "force AC/DC power mode" feature, there is no reason for the software to make the player boot in home mode.

Aside from the AC adapter jack, I'm sure there could be other hardware problems that make it think it's in home mode. But the common reason is a faulty jack.