I'm happy to report that I've fixed the issue for good now. The problem was that the tolerances were too tight. All five buttons (including the center) were pushing on the multi selector even at the rest position. It just so happened that my top button was pushing a little harder than the others.
Here's what I did to solve the problem:
Put a dab of toothpaste on each of the buttons on the inside of the backplate, installed backplate on the housing without main o-ring seal. Taking off the backplate you can see approximately where the buttons are hitting and which ones are hitting hard. I then took a simple ivory board/nail file (it's all I had with me) and started shaving away at the inside of the buttons. Shaving down one button would create the problem for another button, as they were all pushing too hard (so relieving the pressure on one caused another to then be depressed too far at rest). I had to do this over and over again, diving the kit each time, until I got it just right. Even though it sounds logical that having the backplate on with no o-ring would mimic the housing at depth - it doesn't. I don't know why, maybe it's the additional pressure on the buttons, but when I finally got the unit working properly with no o-ring on the surface it still misbehaved after about 50-60 feet. So, I kept shaving and eventually it works as intended now, after many frustrating dives and quite a few missed shots because of the misbehaving multi-selector button. I ultimately had to take off quite a bit of material from the backside of those buttons, but I recommend going slow and doing this in steps as you don't want to end up taking off too much. It will require numerous test dives between shaving sessions.
PS - be really careful about scratching the *acrylic* display window as you file down the backside of the buttons. I ended up scratching up the display window because I was so focused on shaving down the buttons and didn't see the file hitting the acrylic at first. I suggest putting something over the inside of the display window while you do this.
I hope that this helps the rest of you.