When in command-mode the smoke on-off switch on bottom of engine should do nothing. I'm with GGG on this one - I'd say the next step is to look under the hood.
I'm imagining a scenario where the smoke stopped working and, rather than repair the PS2 smoke electronics, someone re-wired the smoke heater/fan to bypass the PS2 electronics with only basic on-off control from the slide switch. Thus, the PS2 electronics has no control over smoke (no puffing, no lo-med-hi control).
Did you get this engine new and/or did the smoke ever work in your possession?
