I can play a game and the first ball pickup and drop works fine. I get to the second ball and I'm having an issue with the magnet catching the ball and then releasing right away.

I run the self test and it fails (Test #16)

I get the two following errors upon start-up:
Hand Mechanism X - No Progress
The X direction motor drive failed to move

Hand Mechanism X Home Switch Error
The X direction home switch failed to transition

The hand does move in both the X and Y direction upon start-up to re-home itself. I was getting an error on the ball-in-hand switch (F5) but I adjusted the switch as it was catching on the metal boss. That problem has gone away.

Any pointers on where to go next?

Ordering up the X and Y-nuts today. I'm sure they are the original ones.

Upon shopping the machine (a recent purchase for me), I noted the drop target not working. It stays down all the time. Based upon buffalotx's post, I'm going to focus on resolving that first. I will keep the X and Y nuts for a rainy day.

Update: Looked into my drop target issue yesterday. Seems as though the down switch was replaced at some time and wired in incorrectly. The white lead was on the wrong side of the switch (ie it was on the lever side). Soldered in as shown in the manual and now I have a fully functioning drop target.

Only remaining issue in the test report is BIH switch F5, which I understand to be quite common.