I noticed another FixYa guru here answered a question on another strand that applies to yours:
Also, please note this person on FB claims to be the Lemax fix-all guru. You can ask them more specific questions:http://webcache.googleusercontent.com/search?q=cache:0YBPB3sM28kJ:https://www.facebook.com/eHobbyTools%3Ffilter%3D2+&cd=10&hl=en&ct=clnk&gl=us
The Knex website has building help for this problem. There answer is as follows:
Make sure all rods and connectors are fully hooked together, especially the blue and gray connectors. Even one peice not fully hooked together can twist the model just enough to jam the gears. (You may have it hooked together correctly prior to jam problems so it is good to check since I found a loose on holding the motor.) The chain links need to all be attached in the same direction, and fully hooked. The chain also needs to be on the tower with the hooks facing down and in as the chain runs on the outside of the tower. (Chain should be outside on the front and inside in the back with the 5 yellow bar side in the front.) Check that all gears are positioned correctly according to the instructions and the teeth facing the correct way. If you are still unable to get the seat to drop, you may remove the top yellow cross rod that the chain runs over - the model will also work with this piece removed.
I did all of these steps with my son and his still had trouble dropping all the time. It still seems light so the seat didn't have enough weight to drop with gravity during the non-moving cycle of the orange half gear. We decided to tape on 2 marble passengers to see if that helped. It did!!! When searching for other solutions, I noticed a UTube video that added people also so this seems to be a common solution. Try it or some other light weight added and see if it solves your problem.