I agree that the homemade electromagnet probably has too low of a resistance and is pushing the transistor beyond its 3 to 5 amp rating. The below solenoid might make a good electromagnet. One could disconnect the electromagnet and see if the switch is working by observing the led turning on and off.
Alright well the problem was the lousy electromagnet I made. Instead I found a motor from an old lego mindstorms kit and tested that in place of the magnet and all worked great. Put the LED in place and it works too. Just wanted to thank Robot Dude and zoomkat for their help and patience.