it looks like you had a problem with the DDF1 back in '08. Did you resolve that issue? There has been confusion about the antenna array sequence connectionsin the past which is what that problem sound like. As for why you are getting the reuslts you have now is not clear. A receiver is de-sensed when a strong off frequency signal is active near the receiver. This causes the receiver to lose sensitivity at the tuned frequency. What you are describing sounds like a weak signal condition where you have to open the squelch to receiver the signal.
The DDF1 does nothing more than electronically rotate the antennas by sequencially switching them on and off. It does not amplify the signals. It sounds like you saying that the received signal is low or attenuated when the DDF1 is in line and operating? When you say you "stop" the DDF1 exactly what do you mean? There needs to be at least one antenna turned on by forward biasing the diodes on one antenna to receive a signal otherwise there will be no signal path from the antenna. If you turn off the DDF1 I'm not sure if you will simply end up with multiple antennas "active". I've never tried this condition. Is it possible you have transmitted into the DDF1 and possibly blown the diodes or you may have a short on the control lines. Hard to tell from this distance.
I would suggest you give our tech support a call. We can probably point you to the problem by having you make some measurements.
Ramsey Electronics, LLC