Here's how the locking system works in most Toyotas, and you can verify this for yourself. Get your keys in your hand, and leave a window open.
1. Close the door, and then reach in the window and press the power lock button-----you'll notice that the locks still work fine.
2. Open the door, press "power lock" WHILE THE DOOR IS OPEN, and then close it------you'll notice that the unlock function of the switch is disabled.
3. Close the door, insert your key into it, and turn the key so that all doors lock-----you'll notice the the unlock function of the switch is disabled.
4. Close the door and lock it with the key, so that the unlock switch is disabled. Now, get two hands ready, and stick both of them in the window------use one hand to press "power unlock," and another hand to physically unlock the door---do both at the exact same time, and you'll see that the system works fine now.
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Three solutions:
1. Always close the door BEFORE you lock it with your remote, and you'll never have a problem again. To be honest, about 95% of customers never come back with a complaint, even when the locks are done this way. But I still prefer my installs to be 100%.
2. When you moved the lock lever with your hand, you were tripping what is commonly called the "child safety wire," even though the real (Toyota) name for this is "unlock detection." You can split your remote start's unlock wire with two diodes, as mentioned above------tie one to the unlock wire from the switch, and the other to the "unlock detection" wire-----this wire is in the kick panel, coming in from the door, and it will show a ground the whole time the door is unlocked, and go dead the whole time the door is locked. This method works, but it is inconvenient, and there's a simpler way.
3. You'll notice that turning the key in the door ALWAYS gets the doors to unlock, no matter what sequence of events you used to lock the doors. The key-cylinder wire is the correct wire to use for unlock, and no diodes are necessary.
-The wire coming from the passenger door will unlock all doors 100% of the time with a single pulse.
-On most models, one twist of the driver's door key will do nothing (except mechanically push the driver's door lever to unlock); a second twist will unlock all the doors--------if your remote start has a double-pulse unlock, you may use this wire----but it will take your unit an additional 1 second to get the doors open---a mild annoyance.
-A few uplevel models feature two-step unlocking: One slow twist in the driver's door will ELECTRICALLY unlock the driver's door, and a second twist will unlock all doors. If your remote start offers "first" and "second" unlock wires, you may tie them both into here, to enjoy factory-like two-step unlock.
ANOTHER NOTE: It's possible---and entirely conceivable---that a thief may push a thin rod into your car somehow, and use it to touch the "power unlock" switch. If you use the proper lock wire---the one that tests off the key cylinder---the "power unlock" wire will be disabled, just like Toyota intended from the factory, making your car slightly harder to break into.
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ABOUT YOUR LED: I've never seen/installed an Ultrastart, but there's a much easier way to go about this-----your LED is made for 12 volts, and it flashes all by itself, correct?
Hook the LED's plus wire to a source of constant power. Hook its minus wire to the wire that you identified as "ignition" during your remote start install.
When the car is running, both wires show 12 volts, and the LED will be off. When you shut off the engine, the "ignition" wire goes dead, and shows a pretty good (although not perfect) ground source. Your LED draws almost no power, and this ground is plenty good enough----it will allow the LED to flash whenever the ignition is off. Simple and reliable.