Dan,
I have a set of the gates, and they have been working flawlessly (well, almost*) for seven years now (wow!). I have them connected to be actuated by two DZ-1011 Block Signals, plus one DZ-1050 3-color Trackside Signal; when a train is in front of anyone of these, they gates are triggered. Also, the gate sensors work as well.
(*) Initially, I had problems as you described, and I kept checking the wiring, redoing the connections, eliminating one sensor at a time, etc. Several times one or both of the gates would stay down, and I would have to take them apart (remove the cover) and manually 'wind' them up. I called Dennis once, and although he could not identify a problem with my setup, he explained how the gates and sensors worked, in detail. I again checked everything, and for some reason the gates started working without a hitch. Now, the only problem I have had, which is really not a problem, is when one of my guests takes a picture with a flash, and the gates are triggered.
There are things that interfere with the sensors. As I mentioned, a camera flash may trigger them. I also found that if I run the Lionel Road Maintenance Crew in close proximity to the gate sensors, the gates don't work either. I suspect that there are other electronic/electrical devices that may interfere with the gate sensors signaling.
I hope you can resolve the issue and get the gates working reliably.
Alex