Bill,

I do not recall the 89B being connected to any of the aircraft systems that measure altitude. The "altitude fail" flag is likely a signal integrity issue. If the GPS does not have enough good satellites locked to get an altitude fix within the prescribed limits then the warning flag is set. Check your antenna, the coax and, in particular the connectors. A little corrosion is almost invisible but very detrimental to signal strength.

Let us know what you find.

Regards
Brent  Regan