[Elecraft] K3 NR and S-meter

[2Cents]

Gentlemen,
 
A friend of mine just finished building his K3 which is working well except
for one anomoly: when he engages the NR, at any level, the S meter jumps to
an s7-9 level.  It isn't effecting the signal to noise ratio as signals now
run in the S9 plus region--it is like it is shifting the s meter zero.  We
did the normal s meter calibration using my XG2 and all appeared to be well.
Mode was SSB, AGC slow, on several different bands.
 
Any ideas as to what to try or what we might have overlooked?
 
Thanks,
 
Chuck Teague
NN7U