Here's the exciting part - when I got to the Candy Palace (a few minutes before the park officially opened at 9am) the grand machine was playing! At first I thought, oh, its just the same computerized music that's been there for years, were the paper roll turns but the sound is fake, Midi's or MP3's that sound lame. You can see and here what it used to be like on this YouTube video (link) and here's a fine post from Days in the Park (link) showing the computer controls
The computer controls are gone, in fact, I couldn't even find anywhere to put a coin! I was so stunned I just watched and listed for about 5 minutes until I realized I should capture this on video - it stopped 30 seconds later. I checked back several times and it was never playing again, but here's the proof, they actually fixed this old Machine that Walt Disney purchased in 1953 - I don't like to play "What would Walt think?" but I bet he would be pleased with this - I sure am.
Here's a post from the official Disney blog about the organ: (link)
As for the Candy Palace remodel - decide for yourself. If you had never seen the old Candy Palace you might even think the remodel is from 1955, I will admit they did one heck of a job making it blend in and look vintage.
Same Candy Man in his updated Palace.
As Dave mentioned, the loss of the seating area next to the Coke Corner is sad, there was plenty of candy in there already!