Rotary-screw compressors can fail in a number of ways. The most common problem is oil in the compressed air. Most of the times this happens because the oil separator is not doing its job properly. The chances are that the separator element is saturated with oil (read: you didn’t service the compressor in time! There’s a fixed time limit [running hours] to change the element!).
Another problem often encountered is water in the compressed air. Since the compressor takes in a huge amount of air (with water vapor) and compresses it to seven times a smaller volume, a lot of water will be produced. Normally this water is drained using an electronic or mechanical automatic drain. If this drain is broken, the water will stay in your compressed air and fill up your air receiver and piping.
If the problem persists, it will most probably be a defective pressure switch (which will start/stop, load/unload the compressor), or a defective inlet valve (which opens and closes the air inlet of the compressor). If it’s closed, the compressor is running in an “unloaded” condition and won’t supply any air.