Update:
John...You are Da man! The "feature" was tuned off on both R4LC boards. Once I confirmed both with the bulb, I reconnected the smoke unit and it immediately started smoking. Sorry for the crappy video, but its just to show its working. I also have a bent drive wheel so the engine shakes too much and it doesn't have enough weight since to boiler is off. So it doesn't maintain contact with the rollers too well.
Next up is to wait from my order from Lionel to arrive in a couple of weeks. I will be running 3 wires to the tender, "Serial, AC+, and Common ground".