+1 to Cereal Killer's suggestion that this is a hardware failure. The connections in most of the Walkera TXs I have seen (admittedly a very limited sample!) look pretty solid, but it's possible that the connector just isn't making contact. In your description it seems that the 2 position (which usually means the top connector on the installed switch) should be examined for a cold solder joint or bad connection. It's probably not a short: If it was shorted you'd always see the Mix2 switch ON.
IF you are comfortable in tracing the circuit for this switch -- properly ground yourself and your tools, don't short anything! -- then you can see if you have continuity between the switch and the pin on the processor. Pin 55 should be connected to the 0 position of the Mix switch (I think that's going to be the bottom connector on the switch itself) and processor pin 56 should be connected to the 2 position (probably the top pin of the switch).
Since I don't have an F7, I can only guess that the processor is position the same way as my 7e, which orients this 64-pin package with the pin 1 on the lower right as viewed from the top. If that's right, then pins 55 and 56 are on the bottom side of the processor, the 7th and 8th pins from the left.
A good digital meter should be able to show continuity without damage to any circuits. You need to remove the power and disconnect the battery prior to testing this circuit!
I have included this TX in my list of processor pin connections
here.
