To be clear.... You are now saying that applying a momentary short across the rails with the PowerCab powered up results in the Red LED on the PCP going out. If that is correct then the PowerCab is sending track power to the rails.
Note. When a short is momentarily applied to the rails the red LED will go out. The cabs dispaly may also go out and then return? All should return to normal (Red LED lit) once the short is removed and a second or so has elapsed for the main power supply to reset.
If the above is correct then I feel the Powercab is working. It is possible you are not entering the loco address numbers fully or the cab itself is not set up correctly?
To be sure ..
Turn on the PowerCab mains power unit. The display should light and the Red LED be lit. If so proceed as.....
Firstly and for a one off test, Check PowerCab itself is set to its correct address This has to be 02 (This is the cabs address number not a locos number.)
Power up system ensuring the display is lit.
Remove the flat cable from the base of the handset. (system still has power On)
Press and hold down the "Select Loco" button while refitting the flat cables plug into the handset. Then once cable is plugged in release the button.
The powercabs display should show "NCE PowerCab V1.3 and most importantly the next line MUST show
"CAB ADDRESS = 02". If it shows any other address number then use the key board to enter 02.
As shown here..
Once 02 is confirmed then press the PROG/ESC several times until the display returns to the normal view. i.e. the display returns to the normal start up view of LOC: xxx Lapsed Time, (Note The Time lapsed will start at 00:00 then increment in one minute intervals) FWD: and -------
Place a DCC decoder fitted loco onto the track and .....
Now press "SELECT LOCO" button once then you need to enter the locos decoder address number - Try '03' as this is the default for all new locos and those that have been reset to default state. Press 'ENTER' button once. The display should show Loco *003. If it does then press the 'DIRECTION' button until 'FWD' is shown in the display and then slowly increase the rotary wheel/knob to apply forward direction movement. The display will show increasing power numbers as the wheel is turned up more. The loco should, if its address is 03, move forward as more forward commands are applied via the rotary knob. iF THE LOCO HAS OTHER THAN 03 ADDRESS NUMBER YOU WILL NEED TO KNOW WHAT THAT IS. You can always reset a locos decoder to default address of 03 usually via CV8 entering a value of 8.
In the picture below the cab is set to drive loco address number 3 (003) forwards
Finally for now! On no account must a conventional DC controller be connected to the same rails that a DCC system is connected to. Also you cannot connect two DCC systems to the same rails.