Few more checks, including reconnecting the TIU and insuring that the wire connecting the TIU is not shorted, confirms that the fixed output 2 of the TIU is shorted.
We connected the TIU for track 2 to the variable output and all is fine. The fixed output does not work on output or track 2.
Today, we assembled the S Gauge track loop on the north side, wired it up with an American Flyer transformer and ran a AF steamer. A little track tweaking was needed but all is good. Did some paint touch up work on various areas of the layout and re-installed the triangle pop up painted in water blue for our lighthouse scene.
Next project is to finally get the roundhouse in place so we can lay the trackwork there. OK Bud?
Pictures are coming as soon as the nutty professor aka Bud posts them here.