Well, there is a sensor that detects when the lever is up or down, you would need to remove the plastic cover nearest the control panel side of the machine to get to it. This may or may not be the culprit.
Make sure the white connector is plugged in to the sensor. I suppose the sensor could fail but I don't think it would be unlikely since there are no moving parts on the sensor itself.
Also, I suppose you could try a factory reset by holding the arrow up button while turning on the cutter.
Another thing, were you trying to cut too small of a piece of vinyl? The vinyl has to cover the rear sensor of the cutter or it won't allow the cutter to proceed.
Something else you might try is turning off the sensors in the cutter setup menu.