Update - since at least one other forum member experienced the same issue I did I thought I'd post an update.
After a discussion with the wonderful folks in Concord, I decided to make the effort to fix the crane myself rather than sending it back a second time - particularly since the issue seemed intermittent. I was told to tug gently on the wires at the limit switches to make sure they weren't loose. (They weren't.) I was then told to check if the limit switch wires were sandwiched under a small plate at the base of the boom. In my 2nd attached photo taken from above the boom looking down you can see this plate with a screw at each end near the top of the photo and directly above the shaft with the downward boom tension springs. The wires weren't sandwiched there BUT I did find one of the limit switch wires off to the side next to one of the downward tension springs. I've drawn a blue arrow at that wire in both of the attached photos. At the bottom of the booms vertical movement this wire was under some tension. In this position the large hook wouldn't go up. When I moved the boom to midway in it's vertical range the tension was off this wire and the large hook did go up. If I pulled gently on this wire while holding the up button the motor would stop and start on the large hook. So the problem appears to be the limit switch shorting and the board incorrectly "thinking" the hook was all the way at the top. I took the cab shell off (6 screws on the base) and then the inside crane/motor assembly off the car base. One of the 4 screws to remove the crane/motor assembly is under the lever that holds the gear in place for the cabs turning movement (picture in an earlier post to this thread). You have to remove the screw that holds that lever in place to get at that 4th screw. IT'S VITAL TO KEEP TENSION ON THE BOOM. The easiest way for me to do this was to reinstall the zip tie around the coupler that held on the small elastic bands connected to the 2 boom hooks as shipped from Lionel. Rubber bands would work as well. I was able to lift the entire motor/boom assembly off the car base far enough to reposition the strained wire with the rest of the limit switch wires. You then have to be sure the downward tension springs are engaged as you replace the motor/boom assembly back on the car base.
All in all it was a tedious process. The need to keep tension on the boom to prevent the boom strings from tangling creates a major hassle. It's not for the faint of heart. In order to simplify the number of parts being juggled I completely disconnected the cab shell. This required removing 2 wire connectors from the control circuit board - 1 for the lights in the cab shell and 1 for the TMCC/Legacy antenna. In removing the antenna connector I broke one of the wires. GRJ was kind enough to tell me what micro connector I needed and where to get the correct crimping tool. The micro-crimping was a challenge but 3 or 4 tries later I had that fixed as well.
Hopefully this solves my issue permanently. It's possible the wire that was strained when the boom lowered may short again over time. I never found exactly the point on the wire where the problem was other than taking the strain off seems to avoid the issue for now.
Hopefully this helps someone else like me, particularly if they don't discover the issue until after the unit is out of warranty. As I said early on, my problem only manifested itself at certain times and in certain boom positions.
