FLINX,
I would have to see the engine and look it over carefully, however you maybe right about it being a 763E. Remember there were slight modifications to the Hardware Store models, and you Father further modified the engine himself, which should mean a great deal to you personally.
At any rate it's a prize, if it were my Fathers or Grandfathers, I would have GGG or MartyF professionally restore it, leaving your Fathers custom work, and I would base my entire Train Room around my Fathers Pride and Joy.
Congrats on receiving a great piece of family history.
PCRR/Dave
Along with our Families Double Guns, our Tin Plate Trains are Treasured family possessions. The memories they provide of my Father and Grandfather, especially at Christmas time, are priceless especially to me. Maybe yours are the same, that all depends on you.
A Pair of 263E Work Trains, the original Gun Metal Gray Lionel on the inside Track, the Light Gray MTH P2 Repro on the outside Track. Family Memories!