I don't really understand what you're saying. Could you please clarify?
It sounds like you are saying that if the laptop is switched on while running from the battery then it works, but if the AC adapter is plugged in when the power button is pressed, then it doesn't work?
Is the LED you refer to actually on the transformer?
My initial reaction is that either you are using the wrong transformer (it should have the laptop's manufacturer's name printed on it), or the transformer has developed a fault.