Follow up for those interested.
Looking at the AC regulator, it didn’t look like it would be too hard to replace, so I ordered one from Lionel, and I just finished installing it.
Short ending: the engine responds correctly and works fine. The regulator was clearly the problem as the gurus above thought. Thanks all for the great help again.
Two questions for the crew:
1. The regulator has sort of a black tab with electronic connections on it. On my matching B unit that tab is screwed to the frame with an insulator between it and the frame. On the A unit I was working on there does not appear to be a similar mounting hole, so I did not screw it down. Should I have? And what is that black “tab”? See the “long ending” below to learn why I couldn’t just match the old part.
2. Where is the 6 ohm smoke resistor that I see a lot of posts about? I thought about replacing it with an 8 ohm resistor as suggested, but I don’t see it. Is it inside the smoke unit? What is involved in replacing that?
Long ending: I ordered the part as shown above in this thread, which is exactly what Lionel showed in the parts view for this engine. But upon disassembly I quickly realized that someone had repaired this before, and used a different regulator part! It didn’t look like the new part, and had a different number. They had used shrink tubing and simply spliced all the wires matching colors. I probably should have done the same, but decided to use the pin headers as provided on the new part. Luckily I also have the matching non powered B unit so I opened that and used that as a reference. The only tricky part was adding the brown wire from the other electronic module to the pin header that goes to the truck, but I figured that out well enough. I will say that in this case working with fine gauge wire and small connectors, being near sighted was an advantage.