So there is a 12V power supply that sits in the box with the IOwarrior currently that transmits power down 55 ethernet cables via a CAT5e connectors on each site, one for the smaller device shown earlier, and the other end if the reciever device which is currently the holding place of the IOWarrior.
either side has a RS232 chip for communication, and then the response from the RS232 chip is then passed directly into a single Input Pin on the IO Warrior. i presume i can do the exact same thing, but just replace the IOwarrior with the Anduino... or am i totally wrong about that

Im just making sure i guess that the current solution is not over engineered, to the point where it is not functioning as well as it could be.
Really appreciate your answers, cant describe my current stress over this one device.
Attached photos of the internals of the current master device.