Flash Photography Problems

What I am now understanding through the process of elimination and the help of you all, is that when the external flash is attached to the camera, the pre flash is not being triggered for some reason, as it was previously doing. Hence, the image is being overexposed receiving the full flash power.(As mentioned before, I took over 300 properly exposed shots before this problem developed.)
On the other hand, when I press the FE Lock (*), the pre flash is emitted and the image is properly exposed. Also, as mentioned before, when using the built-in flash, a pre flash is triggered in the normal way (without pressing the FE Lock) and the image is properly exposed. My question therefore is why is this happening? Could it be either:
A) A external flash that has begun to malfunction? Incidentally, the flash is an inexpensive automatic flash - under $60. (But then it works when the FE lock is engaged!)
B) A problem with my Canon Rebel XTi 400D not sending pre flash signal to flash, maybe the shoe contacts? (But again, it works when FE lock is engaged!)

Any help will be greatly appreciated as being outside the USA, eliminating this problem can be very costly.

Sounds like a problem either with the flash or the camera. Only way to tell, that I know of, is to try the flash on another body or try another flash on your body. If the flash does the same thing on a different body, then the flash is probably at fault, if not then it's most likely the camera.

Thanks Mark. Will try and find another Canon user.

Have you tried new batteries?

Bad batteries can cause odd behavior

That was the first thing I did without success. Now trying to locate someone with a compatible flash or a canon camera compatible with this flash.