paris1 is pretty much spot on with this. I think the roof has 14 sensors, many are Hall-Effect (I don't recall how many or all), a Top Control Module (known as the TCM). It also takes other signals to do its work, such as the outside temperature sensor values put on the CANBUS by the Combox. If you mind is dizzying a bit with the a details, that was a bit of the point.
On top of the sensors, the wiring harness is prone to have wires break - just looking at how the harness is attached to the articulating arm, and how the wires bend ... trail of tears there. It's a wicked cool roof, but you really want to be able to talk to the TCM (that requires BMW software) and I imagine there is some diagnostic capabilities (e.g. certain sensors are out of range), but I don't know that for certain. I have all the hardware to talk to the car but I've not undertaken this task ... I pray I never have to deal with the roof, but I think that's unlikely. What's worse ... finding a BMW tech that actually knows the roofs and is not flying blind by the hour, throwing parts at it ....
That said, it starts with some education. Here are many of the technical documents written by BMW on the E89 Z4:
Read the roof operation section:
ST901 - E89 Complete Vehicle.pdf.
Here is my
BMW E89 Z4 Technical Document Archive.
Also, in your description, I understood what happened to you the first time it failed. But that said, can you describe what happens now, if you go out to the car and operate the top?
One last thing - the E89 top probably operates quite similarly to the E92 convertible, from a reference perspective. Given only 10,000 Z4s were sold in the USA, that may give a larger cross-section of information. Also there is a British z4-forum ... Google it.
Filippo