Mike,
Are you sure it's an ESU decoder? To my knowledge there has never been an ESU decoder that has been able to reset by using a magnetic wand. That was more of a QSI thing.
Did you actually read back the values of CVs 7 & 8 to confirm the ESU ID?
Given that you aren't able to read anything leads me to two possible conclusions:
1) Some sound decoders need to have a programming track booster. They require more power than is put out by your Digitrax system. As Ed mentioned, a PR3 is a good alternative if available as with the right power supply (16V 1amp) it can read most decoders.
In my experience this is not the case for ESU decoders unless it's maybe fitted with additional keep alive capacitors.
2). There could be a poor connection between either the power pickups and the decoder or between the decoder and the motor. You indicated that you got the lights to flash once so this seems less likely.
HTH,
Niel