If you just have a transformer then the power source is AC. Are you sure it's just a transformer or is it a DC power supply?
I think (and very much hope) that it gives DC because it was 'borrowed' from an expensive spectrophotmeter. That said, It is a generic replacement for a supply that went west. I checked it before using it for this project and saw precious little information written on it - but increduality (and knowing that it succesfully charges the spectro's battery) led me to dismiss any worry.
Is the sensor responding to 50/60Hz lighting the room?
I doubt it, thinking the only possible effect in voltage (greyscale) would not be responsible for changing the logic from HIGH to LOW and vice versa.
If you are reading from the voltage divider you don't need a pull down resistor, and in fact it is parallel with your lower divider (the 6k9) resistor so will lower the voltage level considerably. Did you measure 4v7 with that pulldown in place?
Now that you point it out its as clear as day. I measured voltages here and there and do remember that sometimes, when I expected 4.7V approx, I didn't get it, getting close to zero, suspecting a short or wobbly connections on my cheese board. I also remember measuring around 2.5V at some point, but dismissed it because A) I couldn't understand it and B) I blamed wobbly components again. I did however disconnect the 10k pull-down for experimentation and measured 4.7V for sure. I think in this scenario the Serial Monitor showed all zeros consistently but don't remember seeing 1's (regardless of the the sensors' output logic state).
You do have ALL grounds tied together?
Yes as I understand it - but I fear not in practice. I think I've tried most or all combinations but I don't really know quite what distinctions to make. In a nut shell, and if I am indeed using a DC supply, can all 0V and grounds whether they be on the Ardiono, power supply or wired straight into a wall sockets Earth be treated equal? Obviously I would have to watch the current that any of the alterantives can carry, but...
It now works (without my superfluous pull-down) and I can only assume that I had a wobbly connection. Thanks again Graynomad. My next chalenge is to work out how to choose a through-hole resister in Sparkdesign!