I had this exact same problem with my PF500/PF115x2 setup. I emailed Ampeg about it and the tech replied that it IS possible to overload the preamp WITHOUT the the Peak light coming on, causing the cutting out issue. I'm not
quite sure that I buy that that's the problem, because I didn't have any crazy settings on the amp, the EQ on my bass (Stingray 5HH at the time) was flat, and I didn't have any pedals on.
Her suggestion was to set the Gain level with the Compressor at zero, and
then dial in compression as needed. I've been doing that since and haven't had any problems, but I haven't had a need for as much volume as when I first had the problem (volume knob around 2:00, just like you said). I played a gig last Saturday with my Jazz V which has a MUCH hotter output than the Stingray. I was using both PF115's, set the gain before compression just like she said and didn't have any problems, but the volume knob was only at about 11:00.
Like I said, don't know if I buy it, but I haven't had the problem since. Time will tell I guess.
5sg.