I had a similar problem with my Karcher when I first got it. The problem wasn't on the pressure washer or the MTM, but in the little plastic adapter. I believe you use a similar adapter?
The only thing is, the Karcher / MTM had an external leak. But, it wasn't a significant leak that you wouldn't think it was cause what it did. The problem was inside the adapter there was a little O ring and spacer that was missing - it fell out during shipment and fell out on the floor from the envelope the adapter came in. I thought the adapter was a single piece, so I wasn't looking for it. It caused some type of pressure loss between the adapter and the cannon - which does sound similar to what your experiencing - since you know your pressure washer works.
I don't know if this is you issue, but you know the pressure washer works, and the MTM is new. I haven't heard of to many (any?) defective MTMs from the factory, but I have experience the issue with the adapter myself. The MTM is a pretty hearty product.