Do you have 2 cables or one cable going to the Z axis motor?
There was an issue with the original design that relied on the linear scale for the Z axis position loop. They found that vibration could make it change where it thought it was (and correct for it). They thus went to the rotary encoder on the motor for Z axis position when in 3 axis. When in 2 axis, it still reads from the linear scale.
There are some other items to check. Your software may be corrupted and may need reloading. My records show that year 2000 we installed both machines with the Cutler Hammer control and the Computer Express controls. A hard drive was an option so CMOS settings should not be a concern. Connections should be checked.