I have two ideas:
1. When you set it back to factory defaults it may have reset the parameters that tell the machine which model it is. Tech support at Graphtec would know how to fix that better than me.
2. Check the gear on the right side of the machine that pushes the cutter back and forth. It has a wider plastic gear(motor belt attaches to this side) fused onto a skinny plastic gear(the belt that connects to the tool carriage connects to this part). It looks like one gear but sometimes the two will disconnect from each other causing the wider gear to slip when the motor tries to move the tool carriage. This throws off the main board's ability to accurately tell how far the carriage has moved which means when it senses the pinch roller, it thinks it is not in the proper position.