The green LED on the front of the console indicates that the system is in the "Enhance Dialog" mode. This feature allows you to boost the voices and dialog when watching your source.
You can toggle this feature using the speech bubble on the bottom row of the remote which is outlined in red below:
I hope this helps answer your question!
That is certainly strange. The SoundTouch 300 should not automatically enable the dialog mode.
Curiously have you tried to unplug your system from power for a full two minutes and then plug it back in? Can you try to remove the batteries from the remote for a few seconds as well and place them back in? We can also try to factory default the system, you can do this by following the instructions listed HERE.
Let us know how that goes!