Step 1 take the TIU out of the circuit. Connect the Z4000 straight to the track. Light still flashing? There's a short somewhere.
Another idea. Remove everything from your lower level. It could be something as simple as a thumbtack uncoupled dragging.
The "train slowed and then stopped" scenario sounds like a dead engine to me. They don't all blow magic smoke when they die.
As for the fuse, was it blown, or not?