I do not know about your specific situation, but I know of a couple possibilities;
One could be that there is an AC cutout that was either factory installed or aftermarket for fuel conservation ... guess that leads to the question, has it always done this?
Second- and this is from my Superduty, not workhorse, experience; The diesel SDs have a vacuum pump that operates all of the "doors" in the cab air system- if it fails, it defaults to defrost (but you said the blower stops, so that must not be it)
Hope this was more than totally useless... also, we do have a "Workhorse" subforum that you might look up and post there... just a thought
Tom - Retired OTR 20 years 2 million mile club - 1984 Diamond Maxi
I love everybody! Even some above ground!