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I have since noticed that there is a arrow on the body of the regulator indicating the direction of airflow. As luck would have it, their set up is pointing back into the tank - this must explain why no air is being introduced to the hose when I dial down the psi. One would think that it would be a simple matter of switching the fittings around to correct the facing, but man, I don't know what kind of loc-tite they use in China as even a heavy wrench won't budge them. Right now some WD-40 has been sprayed on, hoping to loosen them up.
I've also tried the regulator from my old setup. This one does provide air at lower psi settings, but under 40 it runs constantly even without pulling the trigger. Here I notice air escaping from top of the regulator - is this the norm, or are the odds against me and I have two faulty regulators?
regards,
Jack