The issue with the LED's is normal. This is because the A/F ratio changes SO fast that it looks Dim on the outer ones cause it is there the least, and the brighter one is like the Midpoint of the voltage region it is bouncing around in.
If you remember back to Statistics at school, you may recall the "Normal Distribtuion" graph and what it lloks like. This is sort of like what the signal from the O2 sensor it like, with the peak being the brightest LED. So there is nothing wrong with your gauge.
In all honesty though. The blinky light A/F guages are useless for accurate tuning. I recommend a gauge that gives you an ACTUAL voltage readout, like the one that you can buy from
www.gadgetseller.com