Check here for known PED issues.
Microsoft Windows 8.1, including Surface Pro 3, not Connecting
All versions prior to 1.0.3 of the PED no longer connect to the latest updates of Windows 8.1 machines. They can be updated however using AirTurn maintenance utility on the iPAD 3 and above.
Turn on the PED, set the MODE to Mode 1 by holding down the MODE button until it flashes once. Remove prior pairing by holding down for the power key for 8 seconds untill it flashes red/blue a couple times and turns off. Once you have the AirTurn Utility open on the iPAD, touch the PED picture. Scan for the device and connect it. Then click the "i" icon next to the connected PED and select the update option. Be sure your iPAD is connected to a reliable wireless connection.
Detailed upgrade instructions here.
With Version 1.0.4 all known issues have been resolved.