Yeah, that's a common problem with Manitou forks. I've had that happen twice on my previous Black. Where did you buy the fork from? If it was Nashbar (1-800-NASHBAR) or Performance (1-800-PBS-AIDE), it may be easiest to just return it for a replacement free of charge.
If you do want to mess with it yourself though, remove the large bolt around where the lockout knob is. There should be the lockout coil/device. Fool around with it and rotate it so that it is in its original orientation. This may or may not fix the problem as it could be a number of other things.