I too have this problem after update (? the 8/19 firmware update).
The MS store gave me a new one after they saw pairing fail with a new pen right out of the box.
Same problem after the update (I'd reset the devise but I doubt that un-flashes the firmware).
Telstar1948 said:
"And keep hitting the "Try Again" button as fast as you can while the light is blinking on the pen. I did this 8 or 10 times and suddenly it connected!
Yeah, it does. And then next time it comes out of sleep I got to pair all over again.
And sometimes when trying to pair it says "Device error: connect to Internet"
What's that supposed to mean?