Garmin footpod inaccurate

I use a Suunto footpod and it also gives somewhat different readings on a treadmill vs. running, but not that drastically off.  And I suspect some of the error is inaccuracy in the treadmill itself, to be honest.  (But that's clearly not your problem as you'd know if you were actually going 2 mph).

If you haven't yet, you might try unpairing and then re-pairing the footpod--there might be some residual glitch based on old pairing settings with the new firmware.

Otherwise, I'd say calibrate to the treadmill, or check with Garmin customer support and see what they say.

As a possible point of reference, I got my footpod about a year ago to use with an older (circa 2006) Suunto T3.  It seemed to record distance and pace just fine, except that the autolap function measured the distance in miles but then calculated the pace for the lap as thought it were a kilometer (so it was figuring the time it took to run 1 mile and then dividing by .62 miles (or something like that), so the lap pace was way off).  Obviously a software glitch in the watch.  Suunto wound up sending me a new T3D and a new footpod, which now work fine together.