Possibly a cracked/ broken magnetic flywheel ring?
Location of the switch is on page 7 of the owners manual: https://www.lionelsupport.com/...ents/71-1103-250.pdf
I'm with Rick on this. I ran into the same problem on a similar engine. Here is the link to the replacement parts page on the Lionel web site under support. You can replace the ring for ~$1.50 or the
|6101103540||FLYWHEEL W/ MAGNET W/ COUPLING / SCALE PS-4|
You'll have to open her up as they say.