Any sub with auto-on will require a certain level of signal before it kicks on, so that's not a problem. If you find the required level is too high (and everything else is working properly) you can always turn up the sub level in your receiver a bit and turn the level control on the back of the sub down -- that puts a hotter signal out over the cable. If you go too far you can overdrive the output capability of your receiver but a few dB is normally all you need. In other words, don't worry about that.
Unless you are playing so loudly that the sub is in hard clipping, the issues you are seeing with the level control do sound like a sub problem. I assume you are 100% sure that you are adjusting the level control knob not the crossover frequency knob, right ? Sorry, but we have to ask
At first glance it does sound as if there might be a problem with the electronics -- but if there is Axiom would just send you out a new amp; you wouldn't have to ship the whole sub. Replacing the amp is pretty easy.
Definitely call Axiom before you go any further. They keep pretty long hours and have support on the weekends as well, so even being a bunch of time zones away shouldn't be a big problem.
We'll keep our fingers crossed here
