I've had the same issues as you with my Mastertemp 400 twice in the last 7 years. Both times it was the thermal regulator. Both times it looked fine, but I replaced it anyway and it worked. Not scientific at all, but that worked each time. While you have the thermal regulator out, make sure the manifold bypass is not broken. I purchased one, but each time I had the thermal regulator out, it was fine.
The white powder you see coming from the drains is DE powder backflowing from your filter. For some odd reason, my pool is plumbed similar to yours. Whenever I open anything in the system for a long enough time, I get powder out of filter going back into the pool from the main floor drains. Either vacuum it up or have your robot take care of it.
Personally, I'm out of warranty, so spending $50 on a regulator is a no-brainer, because the service call is a few hundred dollars and most likely will add a marked up thermal regulator.