Ok. If the LED response changes that means the ADC is working correctly (as is the gain control for the ADC). And you're correct: the unit auto-compensates for the input signal based on the pad setting.
If you move the unit to some other house and it works fine, I agree with
@GlennO here: the problem is your house in some way.
If you move the unit to some other house and it still sounds thin like this, I'd open another ticket with G66. Something isn't right.
If it works at another house the answer is your house is the problem.