Your photo was very helpful -- there's some weird wiring there, my friend. It's all my fault for not having been more explicit that the instructions referred to the connectivity as shown in the schematic; the physical layout is different. The fundamental idea is to isolate +12 from +12F. You have properly cut the wire that connects C2 to L1, but you've left many other things tied to the terminal of L1 that used to connect to C2. Heaven only knows what you've got, but whatever it is, it's not going to be happy.

What would accomplish what I'd had in mind is simply desoldering that one lead of L1 -- just pull it out and lift it away from the PCB. That absolutely guarantees that nothing will be connected to that terminal, without drilling, cutting or other mods to the PCB. Then solder one switch terminal to that floating lead, and the other to the hole you left behind. Add the diode across L1, and try the experiment again (assuming that the board was not damaged). You may still encounter hidden gotchas, but at least they'll be legitimate ones.