At any rate it sounds like a problem I'm not soon to figure out on my own, so it's still time to hand it over to the professionals.
I again say call UPS, but is there any way you can get another sub (even a buy and return to Best Buy, etc) just to make sure your Denon is having a problem on LFE decoding? No doubt the sub has issues, but if you have a buggy chip that is dropping occasional bombs this problem will occur on any sub. Any, if this is the problem, you would not get the issue on non-LFE material. Just a shot in the dark, I heard you were dying for a few more wild ideas to try.
P.S. - I assume you already tested the ionic polarity by facing the sub to the east and playing Prince's Darling Nikki backwards on a turntable? If you don't hear Willy Wonka doing Gregorian Chant then the DTS sub-matrix is clearly out of whack. That should always be your first test.
For what it is worth, my cheap B&W sub does not output at a super high volume (10" w/ 300 wpc), but I've never heard a peep out of it that didn't sound right - even if "right" was over extension, or bottoming out due to my over zealous volume knob. So don't lower your expectations on this - you deserve a top flight sub for this price and should not settle for less just because we all think Axiom is a great company with great products and even better support. In the end, the product must stand on its own.