I wanted to share the answer from GRE as to why the signal drops out every 2 seconds. A quick fix but a real pain. The scanner is great and it is a feature I can do without.
What you are experiencing is exactly what I would expect to see when Priority 
mode is turned on. 
Only one channel can be set as the Priority channel.
When Priority mode is turned on, the radio will sample the programmed priority 
channel every two seconds for activity. If activity is found, the radio will 
switch to and monitor the traffic on the priority channel, then resume 
monitoring the non-priority programming after the priority transmission is 
complete.
What you are seeing is the effect of the sampling of the priority channel when 
it is checked once every two seconds. When the scanner checks the priority 
channel for activity, it must briefly stop monitoring any non-priority 
transmission that it may already be monitoring (on any bank/channel in the 
radio), tune to the priority channel and check it (which takes a fraction of a 
second) then it returns to the non-priority channel that it was previously 
monitoring. When this occurs, you will see the S Meter drop to 0 or 1 bars and 
you will hear the audio of any transmission that's in progress mute briefly 
while the priority channel is checked. If you deactivate Priority mode, the 
scanner will not sample the priority channel for activity and the dropouts will 
stop.
As you have noticed, the dropouts occur on every channel that is programmed in 
the radio. This is because the radio will always sample the single priority 
channel for activity regardless of which bank and channel it is tuned for.
I hope this answers your question - please let me know if I can be of further 
assistance.