Yes, I believe the XLH1 has some compatibility issues with some devices controlled via LANC, especially third party devices that weren't specifically made for it. I've never had an LANC problem with my H1, but I've only used it for remote starting/stopping our P+S Technik converter... I haven't tried it with a remote zoom controller yet.
I seem to recall in the past someone having the same problem with VariZoom remotes... if I remember correctly some VariZoom models would work not work with the H1, but one specific model would.
I don't think there is anything wrong with your camera, its settings, or your remote... I think they just don't happen to be a compatible combination.
I think I would ask the remote manufacturer if your model is compatible with the Canon... and if not, whether they have one that is.
T2
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Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com