I have a couple of Lionel ES44ACs that I am thinking about converting to 2-rail. I haven't done it yet. This will be my general approach if I get around to doing this project.
1. Use Northwest Short Line wheels to convert the wheels. I converted a MTH steam engine using NWSL wheels and it worked well. That conversion was some years ago. Hopefully, NWSL has replacement diesel wheels.
2. Remove the Lionel electronics and convert the engine to battery power. I would need to remove the Lionel electronics anyhow if I want to run the 2-rail engine using DCC or conventional DC. As best that I know, Lionel electronics will not work with 2-rail. Therefore, a battery conversion makes sense.
3. Do the body conversion: 1. Kadee couplers, 2. Fixed pilots, 3. New handrails, 4. Other details depending on the model.
I am sure that this can be done. It is just the a matter of doing it. NH Joe