... maybe your Altitude Encoder needs adjustment ? If it is an ACK01 it is simple, but you need an Avionics guy with the equipment. Hope that helps ...
Mine just quit. I "re-racked" the transponder, and re- secured the encoder to its mount, and back to normal. Only a year and a half, and those two things will be worthless!
Mine's gone wonky a couple of times through the years. I just have the avionics shop adjust and recertify it. Lake Hood airspace is sensitive to altitude so when the encoder is mis-reporting tower questions it. I just turn mode C off until I get it fixed.
Check the basics. Wire connector secure on encoder. Re rack the transponder. Check for loose wire connections at the back of the transponder. Check for leaks in the static lines. If there is still no improvement, have the encoder bench checked. It is most likely going to be an encoder issue, not transponder, as altitude is the only issue you report.
Mine just quit. I "re-racked" the transponder, and re- secured the encoder to its mount, and back to normal. Only a year and a half, and those two things will be worthless!
I disagree.
If you need a transponder & encoder where you fly, then you'll still need them in 2020.
You will also need an ADS-B out system, in addition to the transponder.
Some ADS-B systems incorporate a txp to replace your existing set-up, some are in addition to it.
I will likely keep my "legacy" mode C txp, and add something like the Garmin GDL82.
Local shop had some issues with an old encoder after an install, Now they install a new encoder as part of the install as standard procedure. The encoder was giving hem issues.