Recently my XP50 settings were reset to their default. Now I have a problem when I play and record using my PC sequencer connecting to the XP50 through the midi in/out port.

I have been sequencing using Cakewalk Pro 5.0 quite happily until now.
I'd use the XP50 keyboard as a midi-in and transfer patch SysEx to and from the XP50. I could control the patches and controllers and banks from Cakewalk. I didn't use to control performance change with Cakewalk though.

Now for whatever reason I find there's an uncontrolable drone until I disable Midi-Echo (thru) in Cakewalk and hit PANIC on the XP50. This wasn't neccesary before so why do I have to do it now?

On the XP50 When I switch LOCAL to OFF I lose the sound from my keyboard even though the sequencer is active so that teqnique isn't working and I'm now a bit stuck. It seems to be a matter of tweaking. Can anyone help me?

well, it seems that you have a midi loop problem, when u switch local=off on the XP50, it will need to receive the note(and other) information from the thru=on on the Cakewalk, and as u told, in this condition u have no sound on the XP, so try to put THRU = AUTO on Cakewalk, assign a midi channel to each of the tracks, put LOCAL = OFF in the XP, and u're probably in !!