I recently bought a plane with an AXP322 controlled by an IFD540.  The first few times I flew it everything worked as expected,  however recently I started hearing from ATC that they weren't receiving altitude.   When I looked down lo and behold it was in On mode instead of Alt.  I'd reset it to Alt and it would be good until the next flight and then the same thing.   On the ground it shows Ground mode but when I takeoff it automatically switches to On instead of Alt. 

I contacted tech support and they said it should switch to the last flight mode on takeoff.  Mine does not, it always goes to On regardless of what was previously set.  Tech support said my unit needed repair,  but I struggle to understand how this could be a hardware problem.   Before I ground my plane and spend a bunch of money has anyone else run into this? 

It could be a simple as a setting.  On the other hand, if a wire is missing, then you will have to take it in.

First, go into Maintenance Mode and check the Remote Xpdr settings.  The Squat Input should be set to "Avidyne".  Then verify that the A/C Speed setting is appropriate for your airplane.  If those two are set correctly, the IFD will command the AXP322 to go to "ALT" mode when the speed goes above some threshold (which varies with the A/C Speed setting).

        

If that still doesn't work, you may have a missing wire.  The IFD WOW (Weight On Wheels) output needs to be wired into the AXP322 Squat input.  You'll need the wiring diagram and/or the shop to check/fix that.

The squat input was incorrect,  so I changed it per your instructions. Flew it tonight and it works as should.  Not sure why it worked before and then stopped,  but oh well.  Thanks!