Looking your voltmeter I now possibly see your problem and I doubt there is anything wrong at all.
Never use those LED's to tell you that there is a problem unless the batteries have sat w/o any load for several hours. Monitoring can be a guessing game. A fully charged battery is 12.8 volts. Anything above that is a float voltage. The only time you'll see higher than 12.8 is during or shortly after a charge. Sometimes my batteries will stay in a float voltage up to an hour or so even with a interior light on.
When you crank the engine the Surepower will close (unless it's already closed because of a charge like solar or shorepower) and assist start. It has a delay built into it.
When you turn the ignition on w/o cranking the engine, the glow plugs will draw down the starting battery system. Then when you crank the engine, the separator closes (b/c of the assist signal), starter winds up and current is drawn from both battery systems because the separator closed to assist start. Your voltmeter will drop and that LED showing full charge on your house battery should go out.
After the engine starts the separator still stays closed because of the delay. It also takes several seconds for the alternator to begin to charge. So if the separator opens before the alternator charge comes up, the separator might open up. As soon as the separator see's the alternator charge, it closes (unless still in the delay mode) and begins to supply a charge to the house battery. The full charge LED indicator should come back on quickly unless the house battery is very low.
Unless you plan to install a momentary switch on the assist start circuit, I'd leave it alone for now. The only reason I said to pull the ground is that in most cases it's easier to get to the ground wire than the separator... at least on my build. It's just a quick way to test if you have a starting battery problem. Having an easy option to assist start can be a nice feature although there are pros and cons.
Here is the Surepower info:
The Smart Solenoid
The BATTERY SEPARATOR is designed for use in multi-battery applications as a solenoid priority system to protect the chassis charging system from excessive loading while allowing auxiliary batteries to be charged.
The BATTERY SEPARATOR has two basic operational characteristics:
ASSIST IN ENGINE STARTING
When the starter is activated the BATTERY SEPARATOR compares the voltage of both battery banks. If the chassis’ battery is lower than the auxiliary battery bank, the BATTERY SEPARATOR will engage allowing the auxiliary battery bank to aid in vehicle starting. The start signal must be at least three volts for the operation to occur.
PROTECT THE CHARGING SYSTEM
The BATTERY SEPARATOR monitors the battery system to determine if the batteries are being charged. When the engine or auxiliary batteries (if 1315-200 is used), or the engine batteries (if 1314-200 is used) reach 13.2 volts*, indicating charging is taking place, the BATTERY SEPARATOR will engage, joining the two battery banks. If the drain on the charging system by the auxiliary or main battery bank reduces the system voltage below 12.8 volts*, the BATTERY SEPARATOR will disconnect the battery banks from each other, thus protecting the respective battery banks from excessive drain.
A delay function has been incorporated in the control circuit to prevent the BATTERY SEPARATOR from reacting to momentary voltage fluctuations and chattering. The priorities are to assist in engine starting, if required, and to protect the charging system from excessive power drain.
10189 SW Avery • Tualatin OR 97062 • (503) 692-5360 • (503) 692-9091 FAX • http://www.surepower.com
MODEL 1314-200 (unidirectional)
This unit will activate only when the Main Battery System exceeds 13.2 volts*.
MODEL 1315-200 (bidirectional)
This unit will activate only when either the Main or Auxiliary Battery System exceeds 13.2 volts*.
Sure Power Industries Battery Separator Model 1314-200/1315-200
Battery Separator Installation Instructions
1. Mount the Battery Separator in a convenient location near the main battery bank. Do not mount in direct engine heat. Drill 7/32” holes for ¼-20 self-threading screws and lock washer. For material less than 0.10” add a washer and nut (not included).
2. Connect one end of a new wire of the proper size (see wire size chart) to the main battery terminal of the Battery Separator.
3. Connect the opposite end of a wire installed in step #2 to the main battery positive (+) terminal.
4. Connect one end of wire of proper size (see wire size chart) to the auxiliary battery terminal of the Battery Separator.
5. Connect the opposite end of the wire installed in step #4 to the auxiliary battery positive (+) terminal.
6. Make sure the auxiliary battery is properly grounded to the vehicle chassis.
7. Ground Connection. Connect a #14 gauge wire between chassis ground and the Battery Separator ground terminal. This may momentarily activate the Battery Separator. This is normal.
8. Auxiliary Start Connection (optional). Automatic operation. Connect a #14 gauge wire from the start position of the ignition switch to the Start terminal of the Battery Separator. Make this connection at the ignition switch. This wire should only have voltage when the ignition switch is in the start position. Note: The start signal must be able to produce at least 3V* in order to provide automatic boost, see connection diagram above for manual operation option.
9. Lamp Connections (optional). Connect a #14 gauge wire from the Lamp terminal of the Battery Separator to one end of an indicator lamp (250mA maximum current draw). Connect the opposite end of the lamp to the chassis ground. This lamp will illuminate when the auxiliary start function is activated.
10. Checking the Operation: The Battery Separator should now be operational. Start the vehicle or apply a charge to the main battery. Once the main battery rises to 13.2V* the Battery Separator should activate. Turn off the vehicle or remove the charge to the main battery. The Battery Separator should disconnect the auxiliary battery once the voltage on the main battery drops below 12.8V*.
11. If a model 1315-200 is used, apply a charge to the auxiliary battery. When auxiliary voltage rises above 13.2V*, the Battery Separator should activate. Remove charging unit, the Battery Separator should open when auxiliary battery is less than 12.8V*.
12. The auxiliary start function should activate the Battery Separator if the main battery voltage is lower than the auxiliary battery. The start terminal must see at least 3V* to activate. The auxiliary battery must read at least 10V*.
Recommended Battery Separator Wire Size Chart Wire Length Wire Gauge if using Auxiliary Start Wire Gauge if not using Auxiliary Start up to 10 feet 4 gauge 8 gauge 10 to 20 feet 2 gauge 6 gauge
* Typical voltage settings have ± 2% tolerance.