DZ-1240 Auto Reverse-Stop problem

If i understand correctly, the item cycles if you use a wire but not a piece of rolling stock.  Sounds like insufficient contact between the wheels and rails.  I would try a through cleaning of the rails and wheels and possible adding some weight to the loco or caboose to see of anything changes.  

So you get expected results inconsistently?  The last time I had this happen with something I pulled it apart and rewired because I missed something (i am blaming it on the beer).  I have an older auto reverse board from the defunct pocono mountain lines.  That one uses the center rail power draw to cycle and was a simple 3 wire hook up.  The board from Z stuff appears to be different and a bit more complicated to wire.  Since you are getting results some of the time look for an error in the wiring set up.  Step back give yourself a day and re-visit with a fresh mind.  Sometimes we are so focused on the task at hand we fail to see an error the first time.

I rewired, simpler, prior to this test run.  Yes, the Z uses relays and timers.  The hardest thing about it is programing the dip switches.  The instructions are I not written in clear English.

Did it work?

No it did not work.  So I constructed a small, about  14 feet long point-to-point on the floor of the train room and wired it.  It worked!!!

Now all I have to do is completely rebuild the 18 foot point-to-point on the layout and rewire that.  Should have no difficulty with the controller on that one.

Oh - one afterthought - Dennis at Z-Stuff is fantastic on help.  He truly stands behind his products.

Glad you reached a resolution.  I concur re Dennis.  He was helpful with a 1008 relay.