Did it just start malfunctioning?
Have you determined what is actually happening when it doesn't release? do you still have 120V at the solenoid, so it cannot release? Thought there is, is the solenoid just sticking, or being held closed/open?
Just my OCD nature, but looking at where that LED sits in the circuit, I'd be replacing it and ensuring it works, especially since that is a chunk of the circuit involved in your problem.
Your problem could also be further upstream, i.e., this part of the circuit is dependent on getting a proper hi/lo signal from somewhere else to effect the action of the solenoid.