Your loco looks to have the same mechanism as the 6-18001 Rock Island 4-8-4, along with the same tender frame, or close to it.
I've read that the early production Rock Island units, along with its sibling 6-18003 Delaware, Lackawanna & Western units, had a problem with motor bushings in the Pullmor motors. The bushing bores were mistakenly a little over-sized from the factory, and wore even more with use. Unless fixed right away, the main drive gear would start wearing too, causing an even more expensive fix. And of course, I understand they were quite noisy in operation to boot, with the worn parts.
My Rock Island unit I picked up a few years ago has good bushings in its motor, and even after properly relubricating everything on it here about a month ago, it still makes a little bit of a grinding sound as it goes around my layout. Must be the nature of the beast.
My SSOS board (Static-y Sound Of Steam board ) was initially mounted on some double-sided sticky foam tape to hold it to the tender frame. However, the foam was deteriorating, so I made some plastic standoffs to hold it away from the metal tender frame in order to prevent electrical shorts between the bottom of the board and the metal frame. You might check your sound board and make sure the bottom side is not touching anything your steel tender frame. Can't quite tell from your picture what it is sitting on.
My sound board still sounds every bit as good and loud as the day it was new. In other words, to heck with a small piece of Lionel history - I'm gonna' put a decent sound board (ERR or similar) in mine the next chance I get! To have a sound board not too far removed from fingernails on a chalkboard along with a horn? whistle? that sounds like a sick bull moose during the rut is nothing but pure torture. My sound board has an on/off switch on the tender, and needless to say it spends most of its time in the 'off' position!
Hope this helps.