Matt, I must disagree with the folks who keep telling you to put the SLT T&R before the line card. It was never done that way on 1A2 key systems in Bell System territories. Other equipment could use that scheme, but in general practice, it was never done.
In shoebox installations, (551 series KSU's) there was no ringing generator, and small installations had the key sets wired internally for bridged line ringing. This scheme was not detrimental to any line cards that I ever worked on, and I probably worked on several tens of thousands of them in thirty years.
SLT's need to be wired for A-lead control, and wired to the KSU just as if they were one button of a multi-button set. A third pair (T&R and A leads being pair 1 & 2) is for the CMB. There is no reason that the ringer in the phone cannot be wired on the output leads of the 400-D KTU. I have many practices showing exactly that scheme. The WE 400-D ktu, which was the most prevalent one in use, had no problem controlling ringers after the KTU.
For you to understand how this works, and why you're getting weird results, here's the scoop: To put a call on hold, two things happen, and they happen in a particular order. The A-leads open (this happens on the down-stroke of the red Hold button) the line key releases the T&R (this happens on the upstroke of the Hold button, just as it hits bottom, releasing the line key mechanically.) This sequence, which is tightly timed, is done with relays (later IC's) in the line card. The A relay is associated with the T&R and the H relay is associated with the A leads.
Hanging up in a normal manner, whether by releasing a line key, or just hanging up, releases the T&R before the A-leads open. Therefore, no Hold condition. If for some reason the contact (switchhook or line key) sequence gets fouled up, you'll get a false hold.
See more discussion below about false hold.
This sequence is critical to putting a line on Hold. That's why, in a previous post, I said to install a N/C push button in series with the A leads on your 554 to use as Hold button.
Another admonition: If there are many ringers bridged across the output T&R leads of a 1A2 key system, there is a possibility of a false hold upon hangup. The capacitors of the ringers will essentially cause the A relay to be slow-release, so that by contrast, the A-leads are opening first. This will put the call on Hold. The remedy is to eliminate a few bridged line ringers.
If you try to create a homemade A lead controller, it must behave just like the real thing, meaning that the sequence must be correct.
In the long run, you are better off converting your SLT's to A lead control.
