I followed Eric's advise and disassembled the solenoid valve to see if the plunger is stuck due to scale build up. To my surprise there is very little deposit and the plunger moves freely without any noticeable drag. I clean the plunger and the cylinder with citric acid solution. The problem still persisted. It turned out that the solenoid coil had gone bad. It measured open with a DMM.
There is some trace of rust on the metal surface that mates to the brass body evidently due to very slow water seepage over time. The moisture and hot cold cycle over time must had taken it's toll.
I now tried to find the exact Olab solenoid so I can just replace the defective coil without the need to mess with the brass body and the plunger assembly. I contacted the service folks at Chris Coffee and they had been extremely helpful. Unfortunately they now only stock a Park solenoid - which I expect the coil would not be compatible with the Olab.
I tried to find the Olab solenoid valve to no avail. I checked most online espresso machine parts and ebay.
Here are the pictures of the Olab coil:


I appreciate if anyone know where I can find it.