Excellent video! it sounds like the e-unit may be working. The colored wires make it seem like the e-unit has been "serviced" and given new fingers/plates. At the end of your video, it looks like the bottom set of fingers is not positioned properly - it should be level. A better picture/investigation is warranted.
Typical 3 position e-unit wiring diagram (Ignore the smoke unit):
At this point, it can't hurt to take the brush plate off and remove the armature for testing. There are many different types of the armatures that Lionel used, all differing in wire gauge, length, turns, and whatnot. We are going to look for equal resistance values in the 1.2-3.0 Ohm range.
Set your multimeter to ohms and then test each combination of the 3 commutator faces. The reading should be essentially the same (and somewhere between 1.2 and 3.0 ohms).
In other words, the measurements of A to B, A to C and B to C should all be about the same and within spec.
Then test A to Shaft, B to Shaft, and C to Shaft. All of those should be essentially infinite Ohms (no continuity).
This procedure can be used on most any Lionel armature, however, the specific expected ohm reading varies from model to model.
