I'm assuming when the heading sensor was installed it was paired with the TM head? Also, the sensor has to be calibrated to work correctly. Judging by your comment #5 all directions have been followed to a tee, my next guess would be the heading sensor is getting interference or may not have a clear line of sight to the TM head. Does the jog feature work as well as the straight line heading when the N button is pushed?

I had an Ultrex on a 1652 tin boat and the spot-lock worked flawlessly.