The last pair of red leds being lit indicates the USB connection is up and running OK. That's good.
If there was an error, you would not see that pattern.
If there was a problem with the configuration files, the quadstick may have reverted back to its built in default configuration which is as a PS3 controller in the first four modes, and a mouse in mode 5.
If you had a mouse configuration as your default and that was lost or erased, you would expect the mouse pointer to move around with the joystick, but it will be outputting as the left joystick of a PS3 controller at power up.
If Axes 0 and 1 are changing, the configuration was probably lost and it has reverted to a PS3. The hardware is fine, we just need to restore the correct configuration files.
Alternatively, using the Windows File Manager, find the Quadstick's drive and open it up. If it is empty, we just need to copy in a new default.csv and prefs.csv. I will attach both files to this email and they can be copied into the Quadstick's flash, which will allow it to start working as a mouse again.