Reading the decoder never transfers the sounds from the decoder into the computer. It only reads the CVs (if it reads them). That is why the “write sounds” is grayed out, there is no sound to be written. With all the problems you are having, I would say you should replace the decoder, at this point.
OK, so I can't read or write to the decoder for some reason, and yet whenever I hit the green Go button in the decoder tester of the LokProgrammer, I can hear the faint click of a sound trying to come out of the speaker. The lights will not light up, now will it go. I don't think the decoder is dead, so something tells me that I'm not loading the right sound file. It will not let me load any V3.5 or V4.0 sounds onto the decoder. I don't get why it can read the decoder information but not the CVs.
Normally I would. However, I cannot find the ESU Select Micro anywhere at this point before the National N Scale Convention. I found one in Austrailia, but it will not be here in time. I cannot use the Select Direct Micro as I modified the frame to fit the Select Micro.
If you want to replace it, why not with one of the newer ESU micro decoders. Leaves you with more options. BTW on some decoders some CV will be locked as Rick has pointed out, but you should be able find on the WWW what CV to set and unlock it. If you can read other decoders and a reset ( either CV8 - 8 or 4) wont work on this one, probably toasted. Doesn't sound like there is a electical problem between track and decoder and you should be able to read all the CVs even if it is locked, if the decoder works correctly.
A call to ESU here in the states is in order. Call on a Tuesday or Thursday. That is the only time they support customer service questions, ask for Alik.