The air regulator is off or at 0 (thus no bubbling in the sight glass) and the machine is not in E-stop. Once the gantry starts to move, the air regulator shoots up to 8 psi (bubbling can be seen in the sight glass) and stays on until the gantry goes to home position. I was thinking the solenoid was bad, but since it's opening and closing I'm not sure.
Any thoughts or help on this would be much appreciated.
Depending on the age of the machine, we had different scenarios when autolube comes on. Some machines it is when the machine is out of emergency stop, some machines it is when the spindle is running, and some machines, like in the case of yours, its only when the machine is motion. So it sounds like normal behavior. If you need to check the amount of time between drops, you can either turn on the output for autolube to adjust flow (usually 32, might be another), or create a looped program that moves Z up and down .25" to keep the machine in motion.