The silver solenoid allows the lower function, if its "on" through any means when lifting or when the control is in neutral the mast is going to come down.
Try this put everything back together and then unhook the wires to the silver solenoid, plug the truck in and select raise, unit should raise and hold position as long as the plunger in the silver solenoid isnt stuck in the open position.
To understand how most of these work,, lets forget you have an MT walkie stacker and lets say you have a Crown PE electric pallet jack ,,, now your pallet jack will raise kinda slow and when you release the lift button it falls back down without any imput by you. A PE has a similar electrohydraulic setup (but not the "black" flow control),, push the raise button and it causes the solenoid on the pump motor to close supplying voltage to the pump motor which spins the hyd motor creating pressure which causes the lift cyl to extend, let go of the raise button and all stops and holds. To lower the unit you would press the lower button which provides power to the coil on the lowering solenoid (silver solenoid on yours) the coil with + and - supplied now generates a magnectic field which causes the small poppet or plunger inside to shift and open the fliud path back to tank and the lift goes down. A Crown PE system has no provision for the operator to control the rate of raise or lower, its "preset" by the orffices in the valving and controlled electrically it requires no "mechanical" components to function save the function button, a Crown MT has the provision to allow the operator control of rate of raise and lower (black valve).