If you're sending it back then anything I say is probably surplus to requirements but here goes:
1. I have seen a couple of other reports of the headlight not working on return from Lionel but they were simply the result of the wiring not being securely re-attached.
2. If you cannot program what I understand to be the lead A unit that is more problematic but how is it set up in your CAB2? Lionel is meant to test repaired units pretty extensively and if it worked on their setup but not on yours, the problem might be in your settings. On past form, A-A diesel units should work as one out of the box without having to enter train/lash up settings.
3. I have an earlier Legacy Alco A-B-A setup (in Southern Pacific livery) with a powered B unit which has proved bulletproof since I first got it. Lionel slightly dumbed-down these engines from the last TMCC edition which had motorized roof fans but the Legacy sound is superior and it seems that the latest issue of Alcos is better yet in terms of sound.
I hope you get yours fixed one way or another.
P.S. on 3rd Rail: their diesel models are not always free of issues but they are mostly cosmetic, easily remedied and where more serious more often relate to the drive train that produces the exceptional slow speed performance.