tonggy, did you test all four diodes or just two? If you got those results on each diode individually, they are good. But you only reported two values, so I'm asking.
What you are trying to do is determine that each diode conducts current when forward biased and blocks current when reverse biased. Forward bias is with a more positive voltage on the anode (the rear of the arrow symbol) and a more negative voltage on the cathode (the bar across the tip of the arrow.) Reverse bias is just the opposite.
Since conventional ohmmeters gives idiosyncratic results when measuring other than pure resistances (due to differences in voltage applied by different ohmmeters and due to differences in forward voltage drop of semiconductor junctions), the "Diode Test" function has been built into DVMs. This function works by applying a voltage above any ordinary semiconductor junction forward voltage (2.6 volts and 3.7 volts from my two Fluke DVMs) with a series resistor to limit current, then displaying the voltage developed across the load. If the DVM detects no load current, it defaults to "OL" on my Flukes or some equivalent message indicating blocked current flow on other meters. So what you are actually measuring is the forward voltage drop of each of the four diodes in your bridge, individually and assuring that there is no reverse current flow with the leads reversed, as indicated by the displayed "OL."
You can do this with the diodes still connected in the full bridge because the other three diodes will block stray paths of your test current. However, the transformer secondary must be disconnected because it would effectively put a second diode in parallel with the one you want to test, making it impossible to distinguish between the two diodes.
Normally the MOV could be left in the circuit and ignored, but you indicate that it is a very low resistance, so it could also disrupt the diode evaluations. A good MOV would look like an open circuit to a diode tester or ohmmeter because they only start to conduct above their rated voltage - probably a hundred volts or so for your machine. It is only there to protect the diodes against transient voltage spikes.
The reason for this long explanation is to be sure you understand what information we are seeking and to be sure that you have properly evaluated all four diodes individually. (You do not have to disconnect the diodes to do this.)
I am also wondering about your evaluation of the MOV. If, in fact, it has resistance of only 1.2 ohms, not only is it defective, but it would have burned out dramatically and very visibly only a few seconds after turning on the welder. 55.6 VAC across 1.2105 ohms would dissipate about 2.5 KW. The MOV would smoke in seconds. However, it looks quite normal in your photo. Therefore, the measurement of the resistance of the MOV, the measurement of transformer secondary voltage, the transformer winding(s), or the diodes must be defective. That's what we are trying to zero in on.
So please measure the resistance of the MOV again and let us know exactly what the DVM displays. Any "K" or "M" in the display? Measure the transformer secondary voltage UNDER LOAD. Use a power resistor, a hair dryer, a space heater, a water heater or stove element a water load, or whatever load you can scrounge. Connect the load directly across the isolated transformer secondary. At 56 volts the load will be dissipating only about 1/4 of its rated dissipation. Put the load in a bucket of water if it gets too hot to allow you to make the measurement. To avoid damaging the fan motor, don't leave a fan running at low voltage for a long time.
While you have the transformer driving the load, measure the voltage across the primary LEADS (not the switch). If you have normal input voltage on the primary LEADS and very low voltage on the loaded secondary LEADS, you are screwed. It would cost you more for a replacement transformer or a rewind than a whole new machine.
awright