Thanks Kris, I appreciate the walkthrough. I am glad I didn't do more damage!! I was very surprised though when I plugged it in and saw the Red led come on, go off and as I was reaching to pull the adapter off the socket, a pop! The magic smoke was well contained inside the case, so much so that a few minutes later when I brought it inside, the rich aroma and dense white cloud was still lingering insideOK, the valves and the circuit that detects the state of the rain sensor switch are presumably connected directly to the 24V AC power source. Outputs (to the solenoid valves) are via relays, and the input (from the rain sensor) is probably via an optocoupler. All my comments in post #74 apply.
If you had used a bridge rectifier in your external circuit, and connected its 0V rail to the "C" pin, you would have shorted out the AC adapter. If you had used my design in post #68 and you happened to connect it the right way round to the 24VAC inputs, it might have worked. But using a relay removes all the guesswork.
I didn't have the bridge rectifier's negative to common, I connected the 24VAC to the phase legs of the BR and then +/- ran through the circuit. I took the phase side of the rain sensor switch terminal and brought that in through the diode and capacitor and then to the 0v rail. See below. (C3 is what exploded in the previous picture).