For #1, try calling yourself from your landline and see what happens. If the phone doesn't send out the tones or you think the tones aren't working, I did see a couple of DTMF apps you might give a try. At least that would answer that part of the question for you.
Very good suggestion. I don't think I ever actually tried this until just now and the results are:
1) When I call my cell phone from my landline to simulate my system calling me, I CAN NOT hear touchtone responses on my landline receiver when I depress the number buttons on my cell phone. I do sometimes hear a VERY short chirp when a number is pressed, but it is not consistent and I can't tell if the tone is different for different keys. The * and # keys never seam to emit a tone when pressed.
2) When I call my landline from my cell phone to simulate calling a business with automation prompts, I CAN hear the touchtone responses on my landline receiver when I press any key on my cell phone. It is a short chirp, but longer than example #1. Most importantly I can hear the different distinct tones that different keys emit and every time a key is depressed a tone is emitted, including the * and # keys.
This would tell me that more than likely the problem is not the alarm system panel but the capability of the cell phones being used. All the phones I have ever used evidently only can send out touchtone sounds when the cell phone CALLS OUT.
Would you be kind enough to run this experiment with your landline and cell phone and reply with the results.
Thank you for helping me narrow down the problem.