What Firmware version is currently loaded?
How are you attempting to add channels? Power Scan, TP Scan, Sat Scan, Advanced Scan? The Mercury II often will not add a new channel if an existing channel uses similar service name and Pids. Try erasing any old unused channels before scanning new.
If the problem is firmware related, the inability to add channels usually can be overcome by performing a Factory Reset. We have observed some units that have flash problems and are unable save channel lists, but this is quite rare.
Here is a trick to getting around bad memory blocks used for channel saving. Mercury II factory firmware files have special hidden activation codes for preloaded channel lists. Sometimes if the regular Factory Reset does not restore the ability to save channels. activate using another special code, such as 2860 (for an old AMC4 channel list) in the reset menu (you won't see the digits being entered, but after the 4 key strokes it will prompt "Do you want to load special data?". Select Yes. Seven old unused AMC4 channels will be preloaded, but the new scanned channels will be saved in another block of memory.