Hmm at first glance it sounds like a bad connection from the modchip to the controller's circuit board on the Y button. If you manually draw in the "Y" on a macro and play it back, does that work? (If not it would sound like the modchip isn't connected to the Button Y at all). I don't have any history of software bug related to this, it sounds more like a hardware issue.
You could also try using the Y button to trigger playback of something to see if that works either.