I don't have a Mikado, but it sounds like the speed (tach) sensor isn't reading reliably. On some locos, Lionel affixes the flywheel to the motor shaft with a tiny Allen screw. If you have repair skills, you might try removing the shell. Make sure that the flywheel is secure on the shaft, and hasn't rubbed through the insulation on any wires. Another possibility is some kind of mechanical bind, but I can't imagine why that would ever "settle down."
A lot of folks love speed control, but a properly geared conventional loco does just fine, and there's a lot less to go wrong. If you do find out what's causing your issue, please let us know!
