It sounds like you have an O22 switch in O42 curve. Page 9 of the SC-2 manual shows the hook-up.
Two things that I see:
#1 they show the manual controller connected to the ports on the SC-2 rather than the switch- I don't know why - but, test that setup
#2 The SC-2 is a strange beast - it is always mentioned not to use the same transformer as the track power transformer to power it