ufojoe, I thought I had an issue some months ago. I discovered that pulling and holding the paddle didn't work well. A quick pull and release works. It looks like the system needs a "pulse" to activate. Give a try. Keep in mind that Hill 1 an 2 does not work with Cruise control.
I had some issues with mine a while back. I used to use hill mode regularly, like I was downshifting, I would go up and down quite often. Then it started acting up (not working at times), so I quit using so often, I now only go into hill when I know I'm going to leave it there for a few minutes, no issues.