Do C-40 controllers go bad?

Sounds like the voltage sensors that it uses to run the charge controller have gone bad. Have you checked fuse on it?
Have you checked connections? Did it take a static charge hit on solar panels?

Ya I don't think there is a fuse in it either. But it does appear that the circuitry that determines voltage is messed up. Either the resister it uses to read voltage is burned out or the microprocessor that is reading through it is messed up.

Static charges can build up in high wind and low humidity conditions. We've had alot of very high wind and low humidity weather patterns this winter. Humidity is a natural charge diffusing agent between air and solids. Lack of it leads to charge build ups in solids.
IF you can find someone handy with electronics to pop the thing open look for the first 100k or really high K resister on the cicruit to the battery leads and test it. If it's ok then the microprocessor on it got fried. If not replacing that might fix it. The thing is reading half voltage so it might have 2 100k resistors in series to read voltage. One might be burned out causing your half readings. But depending on what voltages it works with you could have a gang of series and parallel resistors on the input side. That same circuitry is probably not allowing the panels to work because the microprocessor thinks the array never reaches a voltage high enough to begin charging the batteries.

 mr. fouraker,

  thanks for sharing your little adventure with that c- series controller. it's nice to hear of a happy ending to a problem. have to keep that one in mind when working with that controller...you can't be the only one this has happened to. and kudos on that logbook, a year from now you will have a full seasonal cycle for the records. the only trouble i see now is that your wife now has bragging rights to being the house solar system expert!! good luck on that sir!

 best regards, dave