x-arcade grounds are stupid. i just went through a ground problem with mine and it was a pain in the ass. i assumed that ground was ground, when in fact, it is not. the x-arcade board divides the buttons up in groups of 4. there are rows of 5 pin connectors on the xarcade. four of the wires in each harness go to the buttons, the 5th is a ground. however that ground only works for those four buttons. for instance..the player 2 joystick uses 4 switches. there is a harness on the xarcade for the player 2 joystick..4 wires, plus a ground wire. then the first four buttons have their own harness with their own ground. if you use the ground from the joystick harness for one of the buttons, you will have problems.
so if a button, switch, whatever is connected to a harness on teh xarcade, you have to use the ground that is in that harness for that button or you are screwed. this will make your project more difficult, but is the only way to get it to work with the x-arcade. why they dont just use a common ground like most other encodes, i dont know, but it sure does suck