If the box is failing to factory reset, it sounds to me like the Slingbox may not be getting enough power.
The first thing I would make sure of is that the existing power supply is plugged into a wall outlet, as opposed to a surge protector. This should rule out any possibility of there not being enough power being fed into the power supply.
If that doesn't help, I would definitely consider replacing the power supply. You can get a new power supply from this webpage:
Hope this helps!