I thought the interact 1 Mk 2 had a seven HP motor. That would make your phase converter a bit undersized. Check to see if I am correct.
There are two joysticks typically on a interact. One for the z and one for the X & Y. Both have two modes. A slow feed and rapid. The Z typically will only go down slow but will go up fast. Mave you tried it with thw spindle on? Otherwise you need to start tracing wires for continuity. You can also address the I/O table in the TNC to see if the control is seeing the inputs. This will narrow it down to thw wiring, joystick or I/O.
I have seen a spindle motor thermal alarm if the phasing was reversed and the fan was fighting the natural chimney of the motor. the fan should be blowing up, not down.
I suggest you contact a good electrician.
George
(Note: The opinions expressed in this post are my own and are not necessarily those of CNCzone and its management)