Verify CV49 is 0 and CV50 is 16. If that's all ok, verify some part of the decoder is not touching the frame where it's not supposed to, particularly at the ends near the LEDs.
Also, which SD70 do you have? The K1D4 is recommended only for the SD70MAC. the SD70ACe and SD70M are supposed to use the K1D4-NC.
--Randy
Modeling the Reading Railroad in the 1950's
Visit my web site at www.readingeastpenn.com for construction updates, DCC Info, and more.
What DCC system? Are you attempting to program on the main, or on a program track?