2GB Fuze, screen goes blank?

My daughter received a 2gb Fuze for her birthday, brand new from Best Buy, and we’re having a problem. Whenever we use the controls at all, the screen goes blank for a couple seconds. It isn’t powering down, and when the display comes back it is at the same point we were navigating, but any movement on the thumbwheel or buttons causes a momentary black screen that makes the player very difficult to navigate, not to mention pretty much useless for photos and video. Neither a soft reset nor a fireware update made any difference. 

Has anyone else experienced this issue? Is there a fix available?