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Bizzare NEW input error

All of a sudden the game ignores all directional pad up and directional pad down inputs.
They show up in the button log, but the character does not actually jump or duck.

Since the inputs appear in the button log and I can scroll through the menu screen fine, there can't be a problem with the controller.

Cycling the PS3 power, changing to a different user and PSN account or deleting all of the game data from the hard drive does not solve the problem.

Video is here:

Anyone seen this before???