Look, if you can upload a program, that means the MCU is alive: it has to be functional and respond to SPI in order to receive program data and send data back for verification. So I am pretty sure your mcu is alive. If you want to check this more explicitly, you can flash an Arduino program that toggle a digital pin and place an LED across that pin with ground to see if the LED is flashing. The easiest would be digital pins 16 and 17 (which are also analog pins A2 and A3), these two pins are accessible in the pin out area.
Regarding the Ethernet jack schematic: the one published online is for the previous version of 1.4u (which uses SparkFun Ethernet jack). The new 1.4u (Oct 2012 version) is using the same Ethernet jack as the SMT version 1.4s:
https://github.com/rayshobby/opensprinkler/raw/master/OpenSprinkler%20Controller/hardware/v1.4/smt/OpenSprinkler_v14_smt.png
If you take a look, it does show pin 4 and 5 as the center taps, which match the datasheet.
You mentioned: ” I no longer get a short between R4 and I get 50 ohms as expected”, I am losing the context here: did you mention that you had a short before?
If you still can’t figure out the LCD problem, you are welcome to send the kit back to me so I can take a look. However, I am traveling out of the country today, and will be back Saturday next week.