Gluonpilot

I don't own a spectrum system but took a look at the manual and it looks that ar500 has a configurable failsafe:
http://www.google.com/url?sa=t&source=w ... Si4Ri52MdQ
You need to configure rx to switch AP or as Tom suggested throttle to 900 or below when in failsafe.
After RC signal is lost rx will switch to failsafe and set GP to AP.
You would need to do some tests before flight.

If your receiver keeps sending the last received values in case of a signal loss, it will be impossible for gluonpilot to know the receiver is not getting a valid signal. You really need to see if you can set a failsafe value. I would be surprised if it would not be possible.

Tom and Lukasz, many thanks to you both for your feedback.

I have reset the Failsafe mode on the receiver and successfully set it up so the gluonpilot switches to Autopilot in the event of the loss of transmitter signal.

Thanks.