If you can, connect the tiu to a spare piece of track with only one engine getting power.
Check signal strength and report back. If it's very low the TIU maybe damaged. It may save time since if it's bad, we won't get anywhere.
Those 18 power drops may actually be a problem. Just not always. You could connect a light bulb to each of your 2 blocks and also right at the TIU outputs.
http://www.rayman4449.com/MTH_DCS_Info-Tips.htm
http://www.rayman4449.com/DCS_...m#Tuning_your_Layout
from Ray Manley's pages:
Step 1: Select light bulb or SSLT
Light Bulbs:
You can use any bulb with a voltage rating at least as high as the voltage you intend to use on the layout. The amperage of the bulb will determine how many you will need to use and recommend using bulbs with a .2 amperage rating. Make sure you acquire a bulb that has an adequate rated life.
I would suggest connecting both fixed #1 and #2 to your layout. One channel goes to each of your blocks. You can jump the input side of the TIU if you're only using one power pack. You add the bulbs to the outputs (like #1818) and/or at the blocks connections (like a #1873).
or use filters:
https://www.slsprr.net/technical/filter.htm
BTW, what are you using for power to the rails? Is anything else drawing power from it like switch machines?
Did you remove all other equipment from the rails for the test?
Do you have Lionel's TMCC or Legacy connected too?