This is a follow up to my original post to let you know I took on the repair myself. Using a drill bit the approximate size of the bushing, I discovered that it is plastic and not a bronze bushing so it came out quite easily. The replacement part number from The Train Tender is "8855-162, armature bearing insert". Put Red n' Tacky grease on the worm gears and bearing insert and the engine now runs in both directions.
The worm gear on the wheel axle was cupped a bit from the slippage between it and the armature shaft. Using a file, I removed the burrs from the grooves as best as I could. I also noticed that the verticle play of the armature was probably more than it needed to be, and maybe why the original bearing insert got worn out. So I used a .050" allen wrench to turn the set screw down a half turn or so until the verticle movement was between 1/16" to 1/8".
