John,
From what I can see your loco does not have Protosound (PS1). Here's what the Protosound PC board assembly looks like, with it's (original, white) battery -- as you can see there is only one PC assembly, and it's made up of two interconnected PC boards:
:
In your photo it appears that you have two separate PC assemblies, Electronic E-Unit (left), and electronic horn (middle).
You probably have two options:
1.) Check your transformer setup -- It may be inadvertently sending out the horn signal continuously, as though someone is holding down the horn button. Try another conventional engine and see if you get the same result. Also H1000's earlier comment about using a DC power pack to run this engine applies. Make sure your supplying AC to the track, not DC. If you use DC you will get a continuous horn.
2.) If the transformer setup checks out ok -- Now that you have the loco opened up you could disconnect the power lead to the horn PC board and stop the horn. With this choice you obviously won't have any sound until you get the board fixed.
Mike
