This would suggest that you need a newer version of the PCShiftKillEnable application after firmware update.
My suggestion: save your map, reset the Powercommander unit, competely uninstall all Powercommander related applications on your computer, download the latest versions of all software from Dynojet, re-install, plug your computer, re-load your map and see what it says. I suppose you have checked the signal from the QS sensor to the PC box connector?
Resetting the PC unit:
"To "Reset" the Power Commander, go to the "Tools" menu and select "Environment Options." In the Environment Options screen, hold the control key (Ctrl) down on the keyboard and hit "R". This will bring up a "Reset Power Commander" button. Select this option and let the software reset the unit."
Edit: Oh, did you mention that the light in the QS sensor doesn't go on at all? As far as I can recall, the light should go on even though the QS feature is not enabled in the SW. I'm not completely sure about this one though. You might try taking the sensor off (but leaving the power on) and moving the shaft back and forth to see if the light comes on at any point of the shaft's movement. A few weeks ago I just spent quite some time trying to figure out how my QS went nuts during the winter... At first I couldn't even start the bike since the sensor was constantly cutting fuel. Then I couldn't get the shift kill point right so the bike was running but I couldn't make a clutchless upshift (the kill point was too far up in the shift lever's movement range, worked fine when stationary but not at full throttle under load). After several rounds of adjustment I have finally got it working again. This episode seemed to be caused by several things, something to do with installing and adjusting rearsets and removing, installing, turning, and generally toying around with some parts of the shift mechanism.
BTW, what kill time were you using earlier? After my rough adjustments, I'm now at 65ms and it seems it could be significantly shorter. I don't specifically need the feature on street, I'm looking for smooth and fast shifts on track with no false neutrals.