430EX II Compatibility Issues with 40mm f/2.8 Pancake

Convinced by reviews and comments from this forum that the 40mm pancake is a good, fun lens, I recently bought one and indeed image quality was real good!

Problem is that when I attached it to my 7D and used my external flash 430EXII, all the images were overexposed, as in washed out white.  The flash was on auto mode and was reading at 35mm.  I had to manually adjust it to 50mm for images to come out right.  This is strange.  All other prime lenses I bought worked just fine out of the box with my 430EXII.

Anyone else experienced this problem with this pancake lens or with any other lens for that matter?  Please point out what I might be doing wrong.

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JCC
"Photography is therapeutic."
http://www.pbase.com/joshcruzphotos