tranz4mr's pictures and instructions are quite helpful - as he notes, the picture #6 shows the roller and wire on the bottom side of each handle. These control the 5 to 18 volt variable AC outputs, which are the middle terminals shown in picture 2. So for the newer 30B - as discussed by transz4mr - the wires go from the roller arm to the respective 5-18 volt terminal on the inside of the "output" plate of the transformer. Its been a while since I've had either my 30B or 18B apart, but I recall a tab on the inside to which the wire is soldered. This is indicated in the transformer diagram on the myflyertrains website.
If you have the older version of the transformer, then the roller arm is attached to the transformer core and there is a mating piece that extends down from the rotating handle. This is the version shown in the myflyertrains diagram. I've attached a marked up version indicating where the wires go.
In terms of the red lights - they only go on when the circuit breaker is tripped - one for each side of the transformer. Otherwise, the only light that should be on is the green light. Tranz4mr has a nice discussion about how to check whether the circuit breakers are actually working ok.
Again, I'd recommend checking the power cord - even if the insulation seems intact, flex it a bit and see if it is stiff. The old cords tend to harden and then crack when flexed.
If you do have the older version of the transformer with the two-piece variable voltage controller, you will need to pay attention to get the "U" -shaped tabs lined up with the roller arms so as the handle is turned the roller moves correctly in both directions.
By the way, tranz4mr, Doug Peck at Portlines hobbies has the replacement rollers and pins for AF transformers. I'd guess that Tom Seccia does also.
