Before concluding that the PM5109 is defective, you should first be sure that the distortion is really too high.
Your Kenwood HM-250 seems not trustable.
You should first solve it and confirm with another distortion meter.
Regarding the PM5109, we must first check and adjust the power supply voltages to +/- 20V.
Here are some pictures of the PM5109.
With my HP 331A, I measure a THD as low as 0.002% at 1Khz with low distorsion selected.
With fast setting selected, THD is 0.46%