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the signal would have to be below 4.3V for the knob LEDs to light yet below 3V before the buttons lit.

So you're saying the observed behavior is the opposite of what we would expect. Wow, very puzzling indeed.

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When this happens does pressing the face immediately make the dimmer change to its new setting, or does it wait until you make a subsequent change?

When (if? I hope it's if...) the problem happens again, I will verify this, but I seem to recall that it waited until I made a subsequent change for the new dimmer setting to take.

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and it will be as near to the PIC as physically possible.

So how do I identify the PIC?

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If the latter then it may well be connected to a ground layer within the pcb if the pcb is 4 layer, or a trace if it is 2 layer. ( I can't remember which it is. ) Anyway, look for a dodgy connection there.

It's a four-layer board, so if I have to dig into it again, I'll refer back to this post so I'll know where to look.

Thanks very much for this information, this is very helpful. I'm crossing my fingers and praying that my last round of random fiddling took care of it, but if it comes back, I'll have someplace to start looking.
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Tony Fabris