I've done some more online research... This is exactly our problem and first surfaced about a year ago:
http://www.robotc.net/forums/viewtop...=2774&start=15
It was supposedly fixed in ROBOTC 3.54. We are running ROBOTC 3.62
Also, the order of powering up the motor controller and the NXT seems to be important. We are using this order:
1. Power up 12v to motor controller
2. Power up NXT
3. Download and run program