There should be no problem hooking up your LW transformer as you stated. If you still have a problem, re-check the wiring to the uncoupling/unloading track according to the diagram posted.
Make sure nothing is shorting out underneath it.

Also double check the wiring to the controller. Make sure the wiring is in good condition and not  frayed. Open it up and make sure no wires are touching inside, and that the contacts are working properly.


Larry