1 sounds like a bad coil, take an ohm reading and/or feel for dead or live portions (strength and eveness of the pull on the slug). If not rewound, check against the coil spec. of Lionel.
2 It's not a "dead short", but a mild one and burried (likely) Ohms are likely low, but present. The amps draw went high, the transformer began working harder and the fan is also fed from the supply. (a layout lamp would dim too)
3 no gator issues to the coil, (direct short; ohms are near 0). You basically gave the current an easier path to follow than the coil.