First off, welcome to the forum. There are several members (unfortunately, I'm not one of them) who might be able to guide you through your problem. First thing you should know is that the manual you downloaded is for a RailKing engine, and you bought a Premier engine. RailKing products by MTH have a product number that start with "30-" while Premier products start with "20-". This is probably not a big deal for the issues you are having, but you are always better off having a manual (even if for just a similar engine) that's in the ballpark where you're playing.
Second thing you should know is that when you buy a second-hand and older MTH engine, most will recommend that you replace the battery before testing anything. That advice is a little too late here, but still might solve your problem. Yes, this will require you to open the engine up, but just follow the instructions in a more relevant manual. It should only require you to remove a few screws, lift the shell off, find and replace battery, put shell back on and replace screws.
Otherwise, be patient and wait for an expert to provide you sound advice.
Chuck
