ok that was the problem. The rail was pushed into the frog on both sides. The good thing is that it's not shorting out anymore.
The bad thing is I have WTL 12 digitrax controller and cannot find a way to program the turnout.  I pressed the button on the turnout to go to program mode but i cannot find a way to set the address for the turnout on the WTL12.

I am using Digitrax DCC controller
http://www.walthers.com/exec/productinfo/931-890

so i am not sure if that is where the problem is?

But when I use a multimeter on the de-energized turnout with the leads on track a and b I am getting a short circuit throughout before and after  the frog. 

 Bought a HO DCC #6 left turnout and I am getting a short. Can't figure out how to make it work