It works for hard drives on the other bays.  It came like this--just got it the other day from Newegg.

 

Just thought I'd throw this out there to see if anyone else has experienced this problem.

 

I doubt I can RMA it because it was a tight fit in my Prominent 9 case and it got scraped up on the aluminum casing sides (aluminum is soft)--it cut some grooves into it.

 

I guess it's not a big deal and just annoying--makes it not as cool looking either

I would try to RMA it anyway. You might be surprised. Also, make sure you try a different drive in there before you do that.

I've tried 2 other drives in that bay--same problem.  I even tried disconnecting the case hd led from the motherboard as suggested here in another thread--also didn't help.

 

Someone mentioned jumpers on the back of the ss-500 cage.. i don't know if that'd help or not.. there absolutely no documentation with this cage so i wouldn't know how to set them.  I suppose I can try the norco web site for documentation.

Norco's documentation is non-existent. Were the other drives you tried the same make and model, or were they completely different?

Raj, they were completely different.  I've tried my WD20EARS, WD20EARX, and HD204UI in all drive bays and every drive bay activity LED works with every drive, except for the first bay of the 5.

 

I think I'm gonna RMA this one.

Yep, that sounds like your only option.