I think you are, unfortunately, just unlucky. I've had mine since they first came out and had to pay $100 for mine. No problems with mine, and I haven't heard of too many others. I read of a few people who, out of the box, didn't get the red light and returned them as you did, but not much else.
The one I had with my hopper 2k worked well, it was from my 722k and it had a year or so, the tech who upgraded my hopper to a HWS wanted it so I gave it to him in for being awesome and arriving at 7am instead of 8am since I had a really busy day ahead of me.
I've also had mine since they first came out and had to pay $100 for mine. No problems ever. In fact, just posted a thread about my Sling adapter being underwater for 36 hours, and after drying it out, it is still working!
Mine worked fine with my 722k. There was no red light when I hooked it to the Hopper I got the week they were released last year. Dish sent a replacement Sling Adapter; same result, as it was with Hopper #2 that they sent. It took Hopper #3 before they discovered that the first Hoppers lacked something (software-wise, I think) that failed to recognize that the SA was attached. It worked fine after that last replacement. Maybe something similar with yours?