Jon,
no problem to help you with the problem of your AC12.
First of all, you are using the AC12 in wrong direction as in your case the AC11 is the correct solution.But you can make it possible as done and it was the better solution as that what you trying to do now.
The slightly better sounds comes when you use good SL cables instead the M5 and S5-leads. So the AC12 has to be sit at the processor and your 7200 get connected in that way:
First SL cable from AC12 in the master DSP and the second SL cable from the master to the slave-thats it.
Regarding your new try, a C lead is used to enable the communication between m processor and sources and passing comm through sources to.
A M5-lead is defined to enable the communication between a proc/source and the master speaker.
The S5-lead is the com line between slave DSP.
So when you connect a M5-lead from your 861(M-plug) to your AC12(S-plug) the master DSP the master com(from proc to master) is not transfer and therefore no communication is there and the 7200 doesn't wake up.
You can try to modify your m5-lead
Modify M5-lead for slave DSP -sorry don't have it in my mind, and at the moment i have no access to the schematics of the AC12-(but can look later if you want)
BUTi would recommend strongly to use the 2xSL cable to get a slightly better sound
and have a "clean" installation and future proof as you don't need to change wiring
when you go later on for a 861SL processor.
Robert