I have built 700cc wheel with S2C hub for my homemade bike/commuter. It has all the same symptoms as described here. Lots of grease coming out of hub and it makes really annoying noise and clicking when both braking and pedaling in high gear. I contacted Sturmey Archer and they said that some hubs were not machined properly, here is the quote from reply:
"We had some hubs have an issue with the brake surface not being fully polished so when braking it would make clicking, popping, sounds. But I have never heard any complaints about abnormal clicking in second just while pedaling along. If the clicking is happening under braking load I would replace your hub for you. I just need to know the color and hole drilling and a good shipping address."
so it looks like there should not be any sound to start with. I have already made more than 100km for sure and the hub only sounds worse. My concern is it will brake somewhere in the middle of my commute, which is 18km one way. So I will probably go ahead a rebuild a wheel with a new hub if they send it to me. It also ceased a few times to the point when the wheel was locked completely. Considering the weight of the hub I'd expect it to be bulletproof and reliable. So far it is not. I am thinking about eventually switching to shimano nexus if this keeps going on.