Flat rate shipping bug

Hello,
I am having problems with my flat rate shipping set up after the latest update for my 3.6.3 wp e-commerce plug in. For example, My Base Local is set at $1.99 while my Local product Shipping Fee is set at $1.00.
If you add two items, in my case audio CDs at $15 each the shipping should be $3.99 (that is what is showing in my cart), but when you click purchase this product the shipping and handling becomes $7.99. Since my payment method is paypal standard, I called paypal tech support. They looked into and told me that the latest update could have caused the glitch. Please advice me as to how we can resolve this issue.

Thanks