I believe I know what's wrong.
The actuator string attached to the cable guard slide does not travel far enough to bring the launcher arm up all the way. In other words the arm is stopping short of the top.
I had the same thing on my Black Ice.
You probably do have it shooting bullets at the spot where the arrow stops it's travel. But when you pull the cord manually it goes all the way to the top of the rest where it is supposed to be.
You,ll have to attach it to the down cable.