Does it look like the arm is at it's home position? If not, you should be able to pull the cap off the arm motor and rotate it a little by hand. There's a dead spot on the older Mori's where the arm doesn't move even though the motor's rotating.
If it does look home, the prox switch verifying that the arm is home is most likely bad.
What events led to the current condition? Alarm at power up? Or had it been running then stopped?