Thank Lars…
I already contacted BenKamen @ Olympic Noise. He seemed to think it was a Cubasis issue.
I did some further testing and once Patterning is set up, I can record any drum pattern or drum kit I want, but the result is always the same. The beep is somehow triggered when the playhead in Cubasis hits zero on the timeline. If you are in playback mode and hit the back arrow while it’s playing, it will beep when the playhead goes back to zero. I tried muting the monitor function while recording and it still happened.
I got around this issue before, by recording an extra measure or so and then erasing the one that had the beep in it.