I'm new to pathpilot so take the following for what it is worth. Is the z axis all the way up, or down, ie. is the limit switch tripped. If it is then you can go to (I think it is in settings) and temporarily disable the limit switches allowing you to reset and then move the z axis off the limit switch. then reactive the limit switches.
Just a guess.
Phil
PS: If you are new to CNC machining then you sure have bitten of an elephant size mouth full.