Many of the Lionel smoke fans are wired with the black wire as positive and the red as negative, never did understand that. 
As mentioned, it's "almost" universal that the fan motor should run clockwise. I'm sure there must be a smoke unit that isn't true of, but most run CW.
You will need more than 20 drops for a dry smoke unit, when I start out dry, I typically use about 1/2 to 2/3 of the JT's MegaSteam dropper to "prime the pump". When I work on smoke units on the bench, I've put 2/3 of a dropper in, and then about another half, and I still haven't had any overflow into the fan chamber. They tend to take more than you might imagine, especially when dry.
Another issue is the screws that hold the smoke resistor, they tend to work loose and develop high resistance. Make sure they're nice-n-tight.
Finally, there is the smoke regulator, they tend to be a fairly high failure rate item. If you measure the AC across the smoke element with it running, and then change the smoke from low to medium to high on the CAB2, you should see the voltage on the smoke resistor climb for each step. If that doesn't work, you may have a smoke regulator issue.
