Mine was a little bit noisy. Not as bad as yours. It has quieted down with some break in time. Lube in the gearbox is a must. I haven't seen a Lionel engine with enough factory lube in years. The 0-6-0 is no exception.
Part of the issue is that these are geared for switching. Which they do as good, or better than any Lionel switcher ever offered.
Things really have to get turning in order to run at road speeds which exacerbates the noise problem. The faster the gears turn, the more noise they will make.
These appear to have a higher quality gearbox, with a worm that turns in ball bearings. That can make for tighter tolerances though, and vibrations will be transferred from the gearbox to the shell.
I recall a few posts regarding a shuddering issue with the unstreamlined J3as a few years ago. The general consensus then was just give it some break in running.
Trainworld has demo video of every paint scheme these were offered in on youtube. Each one make some level of gear noise, some are worse than others.
Having said all that. If your not happy, contact Lionel regarding warranty repair. You have plenty of time.
