We just had this problem. It was a rusted magnet.



It's very easy to open up the windlass and see the magnet on the gypsy. On A54 #69, we have two windlasses, so I just took the gypsy from the port windlass and put it on starboard. There's no counter on port anyways and we barely use it, so the gypsy looked nearly new. 

By doing that, you could probably get quite a few more years of life and it will isolate whether the problem is the magnet or the sensor. If you look at the AutoAnchor manual, it shows you how to get into diagnostic mode to determine whether the sensors are getting power. That may help you figure out what's wrong. I suppose there could be wiring issues, but for us, it was easily remedied by swapping gypsies and hence, magnets. Good time to grease up the windlass, too.

--
Scott 
2007 A54 #69
SV Tengah
http://www.svtengah.com