Arnold: ...Based on you excerpt from Lionel, it seems that I did not solder the wires in the correct places, but by some miracle the engine still runs great...
What you did is electrically equivalent to what the diagram shows. As long as the purple and white wires stay together and go to one of the terminals and the black wire goes to the other.
Arnold: "...near the carbon bushings (is that what those little cylinders are called?)..."
They are brushes
Watching your video, I can almost hear the clear, easy breathing!!!
George