Sabino said:"IMPORTANT info for new owners of Version 1.1.1 Phantoms!
Myself and at least one other V1.1.1 owner that I know of ran into the same problem when upgrading our new Phantoms to firmware version 4.0.
You must select D-BUS as receiver type or you'll get the yellow flashing LED indicating loss of Tx signal
depends on which Tx/Rx you have. Up until very recently at least the stock setting is PPM unless you have a 3rd party Tx/Rx then you might select D-Bus. But with the stock radio gear PPM is the default option"
Thanks Sabino! Fixed it for me.