Mike,
I found the problem as to why the engine won't arm. The throttle channel was not working. After exhausting every logical senario and consulting with known professionals, I decided to switch receivers and "voila" after linking the other receiver and programming the engine per the instruction sheet. The engine armed and ran perfectly. Now the only question remains is the setting for the gear ratio. Mine is set at 1.5 to1. Is it the correct ratio? what ratio are you using?