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I had the same problem and I called CW and talked with Chris concerning this matter. If you will go to page 29 in your manual you will see a bracket to the right of the truck with a screw in the top, if this screw is lose it will cause the problem that you have. The bit will not touch the wood or the touch pad on the right when it trys to find the bit, it will move just enough to not let the bit touch the pad. Tighten this screw and it may solve your problem as it did for me. :D
I am having the same problem with mine. I have checked all sensors and the screw is tight. Was it the screw on the LEFT side of the head? When the bit moves to the far right and hits the arm to swing it out, the arm does not come out far enough for the bit to hit it. the bit goes down past where the arm should be. I have cleaned everything and can manualy move the bit over far enough to swing the arm out, it just wont do it on its own. Any suggestions?
-Phil
That was the exact problem that I had, the screw that I am talking about is on the right if you are facing the machine looking at the Y-truck following the Y-truck belt to the right. Figure 24 on page 29 in your manual will show the screw and bracket I am talking about. Also you might want to check the plastic guard on the right bottom wheel of the Y-truck and see if it is hitting the touch pad, Chris at CW stated that has been a problem for soon, but the quick fix for that is to shave off the small rib on the plastic guard and put it back on and see if that will fix your problem. In my earlier e-mail I stated the Z-truck, but I was talking about the Y-truck (the horizontal moving truck). Good Luck. :D
Take a look here:
http://www.carvewright.com/forum/viewtopic.php?t=798