@Grumpy_Mike - That link explains a lot, thanks! I had found other research about adding capacitors to the circuit, however, never really understood it before that explanation.
Thanks again for the help! The response on this site is simply fantastic! I'm learning a lot, should have asked questions before building, as obviously I missed a few things during my research while creating this.
I have updated the schematic posted before to include some missing labels on resistors and capacitors. Here is the details on the parts:
TLP-434 - Radio transmitter (http://www.sparkfun.com/products/10534)
RWS-371 - Radio receiver (http://www.sparkfun.com/products/10533)
ATmega - It’s actually a 328
LM7805 - voltage regulator (http://www.fairchildsemi.com/ds/LM/LM7805.pdf)
Crystal - 16 Mhz (http://www.sparkfun.com/products/536)
Relay (2 of them) - 5V - QUAZ -SS - 105D - 1033 (http://pdf1.alldatasheet.com/datasheet-pdf/view/226046/MACOM/QUAZ-SS-105D.html) The second page shows the wiring on the relays I used, which is why the schematic looks wrong.
Diode (2 of them) - IN4001 - Radio shack
Transistor (2 of them) - PN2222A
Resistors - Most are labeled on the schematic
D1R and D2R are 1k, not sure why that doesn't show on the schematic.
Capacitors - As labeled, however, I forgot to actually put the 10uf caps on that go before and after the voltage rectifier.
I have attached 3 files total.
1 - Updated schematic
2 - picture of top of board
3 - picture of bottom of board
So, if someone gave you this board to diagnose, what would you do next? By the way, when the board was first put together it "worked" in so far as the sensors sensed open and closed, the relays switched when told to, and the radios sent and received. Blowing a component because the circuit was designed wrong is a good guess, but I'm trying to figure out which component(s). Assuming I can find and replace the broken part/parts, would adding in the de-coupling capacitors be enough to fix the overall design? I can add in the 10uF caps before and after the rectifier, and I could add in a .1uF cap directly on the VCC and GND pins of the AT without starting over. I actually have several holes for caps between power and ground after the rectifier that I put there incase I needed them to filter out noise interfering with the radios. Turns out the radios where working just fine for my needs, so I never added them. I had the 10uF caps in the breadboard, just forgot solder them to the PCB...