After minimizing the coupling effects, I created a 1 DOF Simulink Model to test whether the setup is stable in the vertical direction. Below appears the model. We have not included yet Eddy Current Damping (simulations showed no great changes).
We create noise with a pulse generator and recorded the step response of the system with the oscilloscope, which appears at Output (1).
The behavior of the system appears stable and so we tried to levitate the plate starting from AC3. The plate would jiggle back and forth back after some time the DAC would saturate. Going back to the Simulink Model, the relationship between saturation limits and noise amplitude seem to determine the stability of the system as well. Looking at other factors that might affect our system, we consider the following: