So I don't know if this is the preferred method, but I finally figured this out:
Magic items require MANA. Each item has a specific mana cost. If you don't have enough mana to cast an ability, you can hold the attack button to convert TIME into MANA.
I removed the time bar on the puzzle levels, so you don't need to convert mana anymore. You can still convert in the random levels. Thanks for the feedback, I changed it because other players may have the same issue :)
