Hi Joe,
Have you read my thread here:
Jet-Pro SofStretch (inkjet heat transfer paper) vs Plotter Test - with pictures! ?
The only things that I can think of are that perhaps you're loading your transfer in a little too crookedly or that your pinch rollers aren't completely outside of your registration marks. Also, are you leaving a little space between your reg marks and the top or right of your page to account for the distance between your pinch rollers and your blade? Those are the only times that my CE5000-60 has had troubles reading reg marks.
What does it do when it goes to try to find the second reg mark? does it just go beyond it, or does it come close to it and not find it?
Oh, I guess the other thing that it could be is how your page layout is...if it's landscape or portrait. If you have your design in landscape and try to cut portrait, for example, it won't find your second reg mark.
Cutting tranfer paper on a Graphtec? 
