Ken - excellent! Please let me know if it turns out to be the controller.
12VAC is just fine.
I did not know you are running DZ-1002 controllers. While I have nothing against them I installed DPDT momentary toggle switches to run my switch machines. However even theses can go bad. I had one go bad after about 5 years. Fortunately when I designed my control board I put in more toggle switches than I needed which paid off since I only needed to move one wire instead of having to get underneath the control board and disconnect the toggle switch.