Just thought I'd update this thread.
He recieved the system back from Novak a couple months ago, but due to all of our various vacations, we finally got around to putting it back in over the last week - in addition to converting his chassis to an FLM extended chassis.
Opening the box, it was the same system he sent to them, but with a new capacitor on it. I assumed that they checked and fixed "something" for the apparent BEC issue.
We put everything back together again, and dont you know it - same old glitching.

ESC shuts down, reciever shuts down, then comes back on.
I pulled his Futaba system off his, and put it in my Revo with the MMM/Neu, and it worked fine (after spending a half hour with the WORST manual in RC history).
I once again put my DX3.0 in his truck, and got the same glitching.
I then pulled my old HV-4.5 off the shelf, and put it in his truck. Worked GREAT!! Next step, I'll put his Futaba back in and run it, but I'm 99% certain that it will work.
Now, how in the @($* do we get Novak to replace this damn thing instead of just bench testing it to spec and sending it back. The Brother in law isnt a very technically minded person, and he's getting really frustrated with the hobby due to this one product. I'm trying to keep him positive, but the string is getting short I believe....
On Edit after sleeping on this: I was ranting a little here, so I'll kick my soap box to the corner now! I'll attempt to contact Charlie myslef tomorrow afternoon regarding this, and see what I can communcate. The first time it was sent back was through the LHS where it was purchased, so there is no way I can know what info was relayed to Novak. However, the second time, I typed up a synopsis of the events portrayed in this thread, so I know what was conveyed to them then.