I can understand that you use the TV remote for the volume/on-off but the cable remote for up/down since you are using the cablemonster for the channel control. That's because the band is controlled by that controller and you probably have your TV (let me guess) constantly tuned to channel 3 or 4. That's why it won't wonk for channel control because you are getting "channel 3" (or 4) all the time and the converter is acting as your RF tuner so-to-speak. In other words, the converter converts everything to one channel which means you have to control the converter to get other channels. Changing the channels on the TV will change the local tuner which the converter does not send a signal to ----everything is on one channel.
In the case of our cable company, this is resolved with a universal remote that changes BOTH (but to the user seems like one remote). When you have an outside source, this may not be so easy.
I don't think your problem is a major issue; it's just that you need to use two remotes as you stated. Once the TV is on and the volume adjusted, all you need to do is switch channels anyway. There's nothing wrong, it's just the way things are set up and a minor inconvenience. Think of it this way: With the cable monster there are TWO objects to control by remote, and that's why you need to do this. With cable companies, they give out a remote that can handle BOTH. So in a sense, you are doing the SAME THING but only with the same remote but pushing extra buttons so that it seems like you are using one remote.