Electrical – How to detect and repair faulty wiring

Two-conductor Romex wire, by its design, creates a parallel circuit between all junction boxes on the circuit that are connected by Romex. Usually, an electrician wiring a house will start at the closest box to the panel, and run a length of 14/2 or 12/2 back to the panel. Then he will run additional lengths (there are code restrictions on how many Romex bundles can come into particular types of J-box, see here) from the node connected directly to the panel out to other nodes, "daisy-chaining" them together node to node (this is especially true for outlets; he'll simply drill holes through the 2x4 studs if the wall hasn't been drywalled yet, and feed the line horizontally from outlet box to outlet box). Then, connecting black to black (sometimes on opposite ends of a light switch) and white to white will put all of the things that receive power from this circuit in parallel, with the exception of switches, which are in series with whatever they control.

So, without any knowledge of your house's actual wiring other than what you've told me, my guess is that the wire comes out from the panel, to either the switch or one of the outlets, and then there is another line whose wires are connected to the same or continuous terminals on the switch or receptacle, and lead to another switch or receptacle. Knowing how these nodes HAVE to be connected in order to work, you are either missing 2 Romex bundles in your picture (there should be an extra bundle leading into two of these device boxes), there is an additional device box that is on this circuit which you have not put in the image, or there is a junction point which you can't see at which the bundles from one or more of these endpoints are spliced with the line back to the panel.

One more tool you may find useful to diagnose this, in addition to your NCVT and plug tester, is a line tracer. A line tracer is much like a breaker finder (in fact a breaker finder can usually be used for this purpose) but usually is much more sensitive, but cannot be used on energized wire (usually line tracers are used in IT/data applications to identify particular data cables). It consists of a tone generator that plugs into a receptacle, and a probe that senses the EM tone being output into the wire by the generator. You can plug the generator into one of the receptacles you know is on a particular circuit, then take the probe and trace the line from the J-box to wherever else it may go. What you're looking for are places where the line "tees"; the probe can sense wires leading off in more than one direction from a particular point, AND that point isn't at a faceplace or other installed, removable electrical device of some sort. That tee is a junction point, containing the wire splice that connects the various endpoints. If you cannot access that junction, either by removing the faceplate right in front of you or by going into the attic above you, then you have an illegal junction point. You need to expose that wire junction, and if necessary put it into a proper box, and ensure that the junction is fully continuous (and that you can read 110V from at least one wire in the junction).

After wrestling with 3way (i call them "two pole" but to each their own) switches I have learned that the only way out is patience and testing. Don't trust the wire colors. Unhook the switches from both sides (or just one switch if you are sure the other hasn't been altered since it was working), put wire nuts on the open wires, and power the circuit back on from the breaker/fuse. Get a multimeter and look for where the hot/neutral is and try to work out the other wires (which ones run to the fixture and which run to the other switch). If it's not obvious yet, check the fixture for voltage, you might find voltage there even with the switch off (second scenario below).

There are two types of 3 way switch wiring layouts. One has the power running from the panel to switch A, then 3 wires running to switch B (two alternating hot depending on switch position, plus one neutral) and finally 2 wires running from switch B to the fixture. The other option is similar but power runs to the fixture first and then to the switches to make/break the path.

You need to know which of these applies to you in order to know which terminals on your motion switch to use. From the look of the switch you have the black (live) wires hooked in but it's not clear if there is a neutral in there too (most motion switches need a neutral to work in a 3way setup). More details will be needed on your situation to provide a specific answer.

Edit, more info: Came across this good discussion (in case you haven't seen it): How do I wire a 3-way motion sensor?

The crux of the problem is that in a normal 3-way switch set up, neither switch really "knows" if the light is on or off, flipping it just reverses the state (for example you can have two switches up and the light is still off) so with a motion sensor you really need it to be in total control of the light, otherwise it might just turn it off after sensing motion when the light is already on per the other switch (not what you want). Most motion sensing switches have an accommodation for this but it is specific to the model.