Teranex 2D issues

I just got my Teranex in but I'm having serious issues. If I set it up as a standalone converter it seems to work fine. I can access all the menus and use all the buttons. If the unit is attached to the computer via Thunderbolt, after a few changes the buttons will not work and you cannot bring up any of the menus. If you hit any button it will blink blue 3 times.

If the BM system pref pane under "Settings" Set output and Set input are greyed out. Under "Processing" Select output processing and Select input processing are also greyed out.

This is hooked up to an iMac running OS 10.7.4 with 8GB of memory.
BMD Desktop Video 9.6.4