Thanks for the reply, it is the new pi device. Found a Troubleshooting list from Pi then called the seller and they are sending me a replacement as we speak. Here is the list:
http://www.mcmelectronics.com/product/R ... -/83-16872
Troubleshooting:
Power should go into the adapter board FIRST, then to the Pi.
Ensure your power supply is rated for 5V@2A.
Double check all connections - GPIO, USB, and ribbon cables.
If powering via GPIO, make sure USB is not connected.
If powering via USB, make sure GPIO is not connected.
Update your OS to the latest version using sudo apt-get update upgrade.
Try swapping USB cables (higher quality is preferred.)
Does your Pi boot without being connected to the touchscreen? If not, reflash your SD card and try again.
Part Numbers
Thank you again.