Yep, had this exact problem.
When I bought my new Wakesetter (Sept05) the Sony head unit never worked properly, the buttons were all messed up. Plus the remote didn't work correctly either. I pulled the deck out and found that one of the two cables that run to the remote had come half way out. Once I plugged them in, the remote started working perfectly. The deck got better, but the buttons are still hosed --(as though they are miss-assigned and some don't do anything at all). I need to start a warranty request on it.
Also, I found that there are two connectors, one right behind the remote head, and one right behind the deck. Check both locations and both cables. I think one cable is power and the other is the control channel.