No Altitude hold Help

I have updated my APM 2.5 board on my Quad with Arducopter 3.1 and after a few problems i had it flying great.  I changed receivers to a Jeti receiver that outputs PPM and that seems to all check out with the setup in mission planner, and the Quad fly's fine in stabilize mode and is stable.

Now when i switch to either Altitude Hold or Loiter the quad descends and will come all the way to the ground and settle down.  In the mission planner when connected it shows for the switch position that the modes are active and do switch when i move the switch on the transmitter i have Stabilize on Flight Mode 1, Altitude Hold on Flight Mode 4 and Loiter on Flight Mode 6.

I also have Channel 7 set to activate simple mode and Channel * to do nothing.

Does anyone have any idea as to why the 2 modes are not working??

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