The thing in question is an antique Ace R/C Pulse Commander radio. It is a single stick transmitter on 27.145 MHz. It was functioning just fine a month ago. Dad and I opened it up to replace the stick assembly since the original is in poor mechanical shape due to the age of the plastic frame.
To do this required:
1) Unsoldering the wire leads between the PC board and the potentiometer (for movement of the stick) mounted on the stick assembly. The locations of the wires were marked on the pot before removal.
2) Removal of the antenna mount from the stick assembly to mount it on the new assembly. The antenna is bolted to the plastic stick assembly with a wire lead between it and the pc board.

We also replaced the switch with a different one of the same type...sliding switch with 6 posts on the back.

Replacing the stick did not work (pot on the replacement assembly was too different) so we re-installed the original one and resoldered all the wires back to their original locations. Powered up the transmitter and its matching radio system and got no response. The radio is fine because another transmitter on a different 27 MHz frequency operated the radio.

We checked for continuity and/or power on the leads between:
1) Battery and the switch
2) Switch and the PC board
3) Antenna and the PC board
4) Pot and the PC board
Everything checked out perfectly.
You can view the schematic in the pdf file at this link:
http://www.e-radiocontrol.com.ar/downloads/vintage/rxtxpulso/27%20mhx%20Pulse%20Commander%20tx.PDF

My dad and I really want to get it fixed because it is sooo much fun to fly but since everything checks out and should be working we're not sure what's wrong. Do any of you have any idea what the problem is? Any help would be greatly appreciated.
Replaced all batteries today with fresh Duracells. The others I was using were new in package Rayovacs. Anyway, after powering up the system the batteries in the transmitter (6 AA batts) started heating up VERY fast, talking temps hot enough to cause a very mild burn in a little under 3 seconds. Dad says its a dead short. We have no oscilliscope and don't know anyone who does. Can't take the system to a shop for testing because it will cost more than the purchase price of a modern R/C system which we have several of. We do have other antique transmitters which work perfectly unfortunately they are not on the same frequency as the system we are trying to fix. Dad and I have decided to replace the crystal in the receiver so it will function with the other antique transmitters we have.
Replaced all batteries today with fresh Duracells. The others I was using were new in package Rayovacs. Anyway, after powering up the system the batteries in the transmitter (6 AA batts) started heating up VERY fast, talking temps hot enough to cause a very mild burn in a little under 3 seconds. Dad says its a dead short. We have no oscilliscope and don't know anyone who does. Can't take the system to a shop for testing because it will cost more than the purchase price of a modern R/C system which we have several of. We do have other antique transmitters which work perfectly unfortunately they are not on the same frequency as the system we are trying to fix. Dad and I have decided to replace the crystal in the receiver so it will function with the other antique transmitters we have.
This system is exactly like the system we were working on:
http://cgi.ebay.com/1976-ACE-1-STICK-R-C-RADIO-CONTROL-TRANSMITTER-RECEIVER_W0QQitemZ280410690255QQcmdZViewItemQQptZRadio_Control_Parts_Accessories?hash=item4149c792cf

These are like the other transmitters we have: http://www.rchalloffame.org/Exhibits/Exhibit26/index.html

...and dad has one of these actuators and I flew it once, VERY different. Designed for 3 channels using the silver transmitters in the 2nd link. http://www.youtube.com/watch?v=xBSRmlIGSWQ

Anyway, dad and I try to keep these old systems funcitioning because they are fun to fly.