GPS Fault & loss of data input signals

So you had to power down the IFD540 to get the transponder to work in modes A and C?  I assume  you are using the squat switch signal out of 540? I planned on using the same signal.  That got me reading the 340 installation manual.  It says that if you set the unit up to use an external squat switch; the pilot selectable states for mode are when in the air: ALT-ON-SBY and when on the ground: GND-SBY. (page 27) I don't know if I like that. 

Steve:  welcome back!!!  I think we should think about the failure modes of the system design: 

Perhaps the logic in the 540 could change so that the default state is in the air.  Sounds like you have the default state as a high (ground) and when the GPS is working and figures out that its moving asserts a logic low (air).  This is backwards.  The signal should default to in the air (safe state) and is asserted when the 540 thinks its on the ground.  [I know that might cause the 340 when the aircraft is powering up to transmit airstuff for a couple of seconds]

or what you can do is change the logic in the 340 and allow the pilot to decide what mode he/she wants to be in when using he mode function regardless of what the air ground switch is saying.  That's the change I would make.  I know making changes at this point in the 340 is costly and difficult since its your vendor. 

or we could take care of it operationally like Orest did and that's power down the 540.  I don't like this one.