So I've noticed a funky power cut when I'm WOT in 3rd and shift into 4th. The power cuts for a bit and the loss of traction light blinks. Then after a second it picks back up. This happens with the traction control engaged. I haven't tried it with it turned off to compare.

Could it be that it's controlling wheel spin in 4th?? Anybody else get this? Almost feels like clutch slip...

Your car spins the tires hard from 1-2 I noticed, really hard, like lays 10-15 feet of rubber!  Maybe you are doing it a little in the higher gears.

Yeah you're probably right. It only occurs with a really hard and fast shift so it could well be holding back the rubber from breaking loose!