I'm like 95% sure that this is a wiring problem. I've had the same types of problems, and more often than not its because some wire is just barely crossing over and touching another wire. Look through all your wires CAREFULLY, try putting on some kind of game that uses all the joysticks and you can have it set still for a while, *Xmen vs Street Fighter with codes for infinite life on, and in 2 player mode, basically its training mode* then go through all your wires, and jiggle them to see if anything happens. I'll bet you you'll start to see some attacks happening that you didn't actually press. Once you figure out exactly where the problem lies, then its MUCH easier to trouble shoot the wiring, and you can unscrew and rescrew in wires to the I-pac, double check to make sure none of the wires are crossing, etc.
Also, do you have any other interfaces plugged into the controls? Like did you parallel a psx joystick or something with the I-pac?
-Luke