Here's a random possible solution. My father managed to get one of these touchpads in the fire sale from Best buy. He found he had the same problem in the case. Apparently while he was wedging it into the touchpad case he loosened the sim car slot on the left hand side. Once he stuck the sim card back in its proper place it started working on the touchstone again. I don't know if the two are linked but that solved his problem.
I believe Mikest is on to something since I do remember hearing that the Touchstone charged the TP with the case on fine, so with the sim card out, it probably is interrupting the charging since the slot is used as a contact. I'm only making an educated guess, someone around here must know.