I'd switch the leads, turn your voltage down and give it a shot! I would turn the voltage way down apply hand piece for one second, remove and repeat. If it's not etching slowly turn up the voltage and increase the time hand piece is applied to two seconds to see if it's etching. If not keep turning up voltage till it starts etching. Ideal sequence is two seconds on two seconds off and usually done 6 to 8 times for a etch. I will say I've etched several knifes now with my home made set up and using just a single stencil cut out and not had any problems. My power supply sounds very similar to yours as it must be a old lab power supply that puts out AC and DC with variable voltage but mine also has a toggle switch that goes from 10 amps to .5 amps! Someone gave it to me years ago and I was tempted to throw it out several times till I got into making knives. Just this winter I decided to give etching a try. Glad I kept the old power supply! I had first planned to use the 10 amp output but after studying home made power supplies I've only used the .5 amp output. Even then sometimes the simple cleaning method of using dish soap between your fingers cleaning method often left a dark area on my stencil. Then I remembered one thread on here I think someone recommended to use a old worn out tooth brush dapped LIGHTLY with Comet (abrasive kitchen cleaner). That works great for me if I end up having a area that just won't clean with finger rubbing. After cleaning I lay the cleaned stencil flat sandwiched between paper towels with some light weight on top and let it dry. If you leave it out with out paper towels on top it dried very warped. I then store it in a dark pill box sandwiched between paper towels to keep it flat and out of the light. Good Luck let us know how it works out for you.
