If anyone finds this - maybe this can help them. The problem was that with a new Atom SQ, UC 3.4 wanted to install an old firmware for some reason. All I did was install an update version of UC (from old 3.2 version which I used with a Faderport), try to upgrade the firmware and it thought I had to upgrade to an old version (0.40).
The solution, thanks to to Nick from Support, was to "reinstall UC using this Streamlined Process". Not sure what's streamlined about this, but it did work for me:
> Disconnect any and all non essential devices from your computer.
> Hit the Windows Key
> Now type “View advanced system settings” and press return
> Click Environment Variables button.
> Click the New button for the top section on this window.
> For "Variable Name:" type this exactly.
> For "Variable Value:" enter a single number " 1 ".
> Click OK and couple times and then open the Device Manger.
> Click the View menu and check "Show Hidden Devices".
> Right click and Uninstall any "Atom", "PreSonus", "USB Audio Device" and or "Unknown Device" you see listed under any category.
> Restart your computer.
> install Universal control >>https://www.presonus.com/products/ATOM-SQ/downloads
> reconnect the device.
> restart computer once more.