ANSWERS: 2
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I'm having the exact same problem, and so far not finding a solution. I have the PSE1979. After I brought it home I read on the guitar box that it's compatible with GH and GHII, no mention of GHIII. Figured that GHIII came out after the guitar was made but hoped it would still work. Didn't. The Psyclone web site says to let the game load to the title screen and then plug in the receiver and turn on the guitar. Didn't work, same problem. Will keep looking. Probably will return the guitar tomorrow.
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I had the same problem, but have it fixed now. I sent the Psyclone folks an email and they responded within 12 hours. Very nice. They gave a host of potential solutions. The one that worked was to have the controller plugged in and the guitar turned on. Then power down the PS/2 console itself. Power the console back up and start up GH3. It worked fine. -Logan
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