Hi Marc,
I'm going to need more feedback and info to do this. If I was there it would probably take me about fifteen minutes to figure out what was wrong, because I could try things and see what happened. The back and forth is very slow, and I often have trouble understanding what you are seeing or experiencing.
Here are step by step instructions. But if things are not going as I describe, you have to try and observe what is actually happening and then write it down clearly for me.
0) Replace the capacitor. It can't hurt, and eliminates one variable. Observe polarity.
1) Hold off on the soft starter for now. Let's finish the brake, since we are close.
2) Turn off lathe
3) Connect multimeter (set to VDC) to PS
4) Turn on PS, set to max voltage 32V, set current limit to 3A, verify that you have 32VDC. Keep an eye on this voltage, it should never drop. If it does, is it because the CC light is turning on? If so, can you reset it by disconnecting the load from the PS then reconnecting?
5) Connect PS to the 6A fuses in the lathe
6) Verify that the current draw is (say) less than 1 amp. This is turning on the solenoid.
7) Push in the d2 contactor by hand. This should close the brake, and the current draw should increase by (say) another ampere, to a total of 2A. If this does not work reliably, is something wrong with the PS? Does the voltmeter show less than 32V? Does the CC light turn on? If that happens, disconnect and reconnect the PS load to reset it.
8) Release the d2 contactor and turn on the lathe with control lever in the 0 position. This should engage the brake and disengage the safety lock. If this does not engage the brake, has something gone wrong with the PS?
9) If the brake is not turning on reliably when the lathe is on and the control lever is zero, because the PS is shuttting down because of the current limit, then try disconnecting d2/12 and d2/14. Does that help?
If the brake is working some of the time but not all of the time, try to gather some clues to help me figure out why.