If it keeps running after it builds up to 40psi and doesn't build up anymore pressure, I would say that there is a problem in the pump itself. Typically this is caused by the flat, metal "reed" valves in the head; many times these reed valves crack, rust or get stuck to the valve plate so they can't open and close like they're intended to do.

Just make sure you don't have any obvious leaks anywhere else around the compressord. It's a good idea to spray soapy water on every single area of the compressor that could potentially be leaking, so around the pressure switch, regulator, pump outlet, coupler and drain cock at the bottom of the tank.

If you don't detect any leaks and the soap doesn't bubble then most likely the Gaskets and/or Valves beneath the head need to be replaced. However, MOST all parts are not available for this unit so we won't be able to furnish pump parts for this unit. But, I would take the head off of the pump and inspect these parts to see what you can find. CP units are made exclusively for Harbor Freight so if anyone has OEM parts, they would.

I hope this helps and thanks for the inquiry!
- MTR

I would say yes, replace the Regulated Gauge first as it seems like it's just not reading the tank pressure accurately. When you turn the regulator knob clockwise all of the way, of course, you should be able to get the maximum amount of PSI through the line that's out of the tank.

As long as the tank Gauge is accurate and you really do have 100psi in the tanks, I would imagine that your Regulator Gauge is just defective. If you change the Gauge and it STILL reads only 40 psi then you'll probably need to replace the Regulator itself.

Thanks!
- MTR