The blade control switch that turns on the blade works the same whether the deck is in a raised or lowered position and there are no safety or shut-off switches that are related to the deck being lowered so it appears you have some other issue.
There are two safety switches to prevent you from starting the engine without the brake or running the blade when you are not in the seat. However, if you can start the engine, sit on the mower and engage the blade, and then let out the brake pedal without the engine shutting off then the brake safety switch and the seat safety switch are both working. Again, both these switches would normally work the same regardless of the deck being raised or lowered.
There are no electrical wires or switches that run to the deck itself but it is possible something in the deck hangers or lifting mechanisms is pinching or pulling on wiring somewhere else on the mower when the deck is lowered. That could account for a loss of electrics when you change the deck position.
Another possibility on an older model like this is failing engine performance. A weak engine may still start and run okay until you add the load of cutting grass. In that case the unit should still run with the blade engaged if you lower the deck over an area with no grass to cut.