sounds like the recoil spring in the housing is broken or displaced, or rope is jamming? It's a fun job that involves patience and can be very fiddly. If everything is working and the spring is ok but there is slack hanging out, you can wind the rope onto the wheel by pulling out slack in the usual way ie pulling the handle, and then holding the wheel and wrapping cord round it, some wheels have a cut out in the rim for this purpose
TreeSmith, November 2010