If the wires back to the controller, and the controls check out OK, it may be the reed switch itself has changed its orientation inside of the "stalk." That is why I mentioned using a magnet while it is connected to a continuity tester.
Worst case you can make your own sensor for about $10, you'll need a little imagination, some epoxy, a small magnet, a flexible flapper, some wire, a pipe fitting and a reed switch -
http://www.sparkfun.com/commerce/product_info.php?products_id=8642
1. Install the pipe fitting into your flow T, make a mark on it to indicate flow direction, then remove it.
2. Attach wires to either end of reed switch to connect back to controls.
3. Mount the magnet on your flexible flapper arm
4. Epoxy the flapper arm and reed switch to the pipe fitting in such a manner that water flow in the direction marked on the fitting will push the magnet against the reed switch (see picture in the link above for one interpretation, the "stalk" can be eliminated if the arm has the magnet mounted on an extension such that it moves up to the switch when the arm moves over from flow.)
5. Test it to make sure it works.
6. Install it with the flow marks aligned and wire it up!