I was also fighting this issue. It appeared to me that the stage events were
not being caught at all. I tried everything and finally updated Air to 3.8
which seems to have fixed it. I have noticed that some of my buttons lost
their text so I will be working on that but it at least auto orients again.

http://helpx.adobe.com/flash-builder/kb/overlay-air-sdk-flash-builder.html




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