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New Bass Has A Problem

I just bought a Fender mustang reissue it is used but the friend I bought it from bought it new and I don't think he played it more that twice. So I consider it new, I have adjusted the intonation straightened the neck and taken the buzz out of all the strings but for some reason when the low E is tuned the first 9 frets won't be in tune they are all sharp. I don't know why this is happening any suggestions?
 
Isn't the Mustang a very short scale? I've had trouble with short scale basses (<32") sounding in tune. I know they CAN - I've heard them played in tune by other people. I suspect that this may be tied to string gauges; bigger strings on short scales just seem to warble and not really lock in on a pitch. At least in my hands and to my ears.