my red lights (not a powerball) are fading as well. not much you can do about that, i don't think (well, unless the newer ones have leds rather than lights). i think they're lights rather than leds, leds don't fade (at least, that's what they seemed to think at the engl forum).
when you say lo and high channels, do you mean channels 3 and 4, or between, say, channels 2 and 4? I don't own a powerball, but i've tried one a couple of times, and there's a BIG difference between the clean/crunch channels and the lead channels (assuming that's what you mean); maybe a dodgy preamp tube or two?
EDIT: if you mean the lo and hi lead channels (i.e. channels 3 and 4), then yeah, both have an absolute ton of gain. you should be able to dial them in a bit differently... maybe mess with the mid open/focussed (whatever it's called) knob a bit?