I'm guessing you have slotted photo-interruptor sensors, with some kind of tab that blocks the gap?
If you can remove the connector from the machine, and apply a 5v supply to the board (battery pack will be OK) the led should light until the sensor is blocked. The voltage at the bottom of R1 and 2, should be approx 3-3.2 volts when the sensor is blocked, and 0v when not blocked. With the board removed, you could safely short across C and E, and the LED should light. If not, you either have a bad resistor or LED. If this is OK, then you must have a problem elsewhere. maybe a bad connector, as somehow the signal is not reaching the controller.