Here is my log file for the SNES buttons not lighting up right. They do work correctly when I play the game so I know they are mapped right, they just aren't lighting up right.
Do you have an entry in the controls_emu.ini file for [zsnesw]?
From the log it looks like you've defined the emulator as using the following controls:
P1_BUTTON1 (KEYCODE_LCONTROL), Blue
P1_BUTTON2 (KEYCODE_LALT), Blue
P1_BUTTON3 (KEYCODE_SPACE), Red
P1_BUTTON4 (KEYCODE_LSHIFT), Red
P2_BUTTON1 (KEYCODE_A), Blue
P2_BUTTON2 (KEYCODE_S), Blue
P2_BUTTON3 (KEYCODE_Q), Red
P2_BUTTON4 (KEYCODE_W), Red
The log shows the LEDBlinky lighting up 8 buttons - 4 for each player. Is this what you're seeing?
I believe this is your cp layout (let me know if I'm wrong):
Player1
P1B1(LCtrl) P1B2(LAlt) P1B3(Space)
P1B4(LShift) P1B5(Z) P1B6(X)
Player2
P2B1(A) P2B2(S) P2B3(Q)
P2B4(W) P2B5(I) P2B6(K)
Which controls are used by the emulator for each player - how is the emulator configured?