What does "DSP firmware needs to be recovered error" means?

As you're trying to connect/synchronize to the unit, you're getting an error that the Firmware needs to be recovered. The most common reason is an incorrect MCLK jumper position. If the minDSP kit/balanced kit is standalone, it "MUST" have the MCLK jumper on the MASTER position.

If it's correct, another reason could be a corrupted embedded configuration (i.e. loaded and halted). An easy fix is as follow:
1) Disconnect all Audio/Power to the unit
2) Press the RESET button on the PCB of the miniDSP 2x4/balanced 2x4. If the unit is boxed, you'll have to open the box I'm afraid.
3) Keep pressing the RESET button and insert the USB cable to the unit. (in the case of the balanced 2x4, insert the 12V supply while holding the reset button). 
4) The LED on the board should go steady. If it's still flashing, repeat steps 1/2/3 again.

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