I had this exact same issue. For some reason the PSU would not power on with everything plugged in. To trouble shoot I turned on the PSU with no cables plugged in and then plugged in the molex cable first which worked. I then plugged in each module one a time. When plugging in the third module the PSU turned off. I then plugged in everything but that module and everything ran fine which made me believe that module was broken since my case was slightly bent during shipping and 3 fans knocked loose. However I then tried using the second connector on one of the other cables which did work. I'm not sure if the problem was with the cable or that rail but it's been working fine using 3 rails with one powering 2 modules for 24 hours.
Something to keep in mind is that KNC just added this to their
support page:
CAUTION - Do not turn on your PSU before all cables are properly connected. You can damage the miner.
Apparently I should not have done that but regardless, I did and everything is fine luckily. However I would recommend turning the PSU off and trying one cable at a time to avoid any problems.