I recently bought a brand new, open-box Klipsch The Three (original) off a store on Ebay and also my control panel (dials, buttons, leds) were not working, but the remote did work. I have a fix for this issue! (Warning: this is pretty easy but it does involves disassembling the speaker, so proceed with caution)
I submitted a ticket to Klipsch, but I did not get a reply. I was thinking of returning the speaker and purchasing another one from a different store. I contacted that store over the phone asked about making sure that I would get a working one without this issue or see whether I could exchange if it also had this issue. I described that I had purchased one, but it was not fully working for me due to the above described issue.
He said that it's rare, but he has also seen this before, and in that case he was able to just unscrew the back panel and disconnect and reconnect the cable from the control panel to the main board to get the controls working again; sometimes it becomes loose during shipping and handling.
First I unplugged the speaker from power, then I unscrewed the 10 screws around the outer perimeter on the back panel, then I used a flathead screwdriver to gently pry the panel from the speaker and then slowly and carefully and slowly pulled it away from the speaker, paying attention to the wires connected on the inside to the main board/back panel. Do not pull the board away more than ~2 inches to avoid breaking any of the wires on the main board and best to have something sturdy on your desk to lean the main board against. Once I did this, I saw that there was a cable coming from the area control panel (it's wider than most of the other cables) that was not connected to anything, it must have shaken completely loose in shipping. There was a connector with I think around 12 pins that was the same size as the cable on the main board near the side where the control panel is, so I used a pair of pliers to get hold of the cable and then by hand I reattached the cable to that header on the board. I sealed the back panel back together to the speaker, reattached the screws. I connected the speaker to power, turned on the power switch on top and I was able to see the input selector LED light up and the controls work fine now.
(I want to give credit to Ron Cocco at The Sound Seller in Marinette WI, whom I ended up not needing to make a purchase from, but was very professional and friendly over the phone and provided the information so that I could fix this issue)
Note: while this is its own issue, without the control panel and LEDs working, you can't perform a factory reset and while firmware updates can still work, you won't see a confirmation on the Wi-Fi LED when the firmware update is done.
