Take the smoke unit out and take it apart. Take out the element and the felt underneath the element. There is a hole in the bottom of the cast bowl that needs to be open. It gets clogged with pellet material. Scrape all old pellet material out of the bowl, and install a new felt lining if need be. Make sure the piston is free to move up and down and does not hang up.
Once it is all cleaned, reassemble the smoke unit and try it. It should puff normally.
I couldn't get the cap off. It appears to fit inside the main unit. Instead, I just poked up through the hole in the bottom and reamed it out. I put everything back together and I have smoke again. I'm glad I bough the conversion kit, though. I needed to replace the felt pad that goes between the cap and the body of the locomotive. Thanks to you and all who took the time to answer this noob's questions! I'm sure I will have more once I start expanding my layout.