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@TheShipwright
It does very much like adjustment or more likely your cable's stretched and has gone out of adjustment. It might be that setup initially was on the edge of being out and now the cable had stretched it's gone to far.
The real issue with these shifter/hubs is that it's OK to "set it" on the 4th but you have no way easy way of testing that each other gear selection is actually pulling or releasing the correct amount of cable. There's an article on Sheldon Brown's site where he shows using a vernier to measure the cable pull of the shifter but I'm sure you will not have to resort to that.
As M_V says get on it (the adjustment that is) as the more you ride it like this the more likely you are to damage the hub properly.
They're good hubs (well I like em) if they're looked after.