Your 4017 pin numbers do not seem to be in the proper order for the lights to be sequential. For example, 4017 pin3 should feed the 1st light, but you have pin1, pin 4 should feed the 3rd light, but you have pin 2 etc. Don't you have them mixed-up? And the diodes?
You don't talk about the switch but I think that it is used to shorten the sequence, but position 4 seems to light only one light continuously instead of 5 lights. All other switch positions seem OK. Please check your switch position 4.
What is the regulator used for? With your well-filtered 12V unregulated, the parts don't need it.