After I wrote this post, I did some more detective work too and found this out:
1. Of the 4 Ross 042 switches I have, it mainly has a problem with two of the switches, and I only have a derailing problem on the curved leg of the switch (where it enters the base of the switch and is directed by the points to take the curved leg).
2. I tried running the engine in both directions and that's when I found out it had a problem with the second switch. The switches are configured as a crossover, to go from one adjacent loop to another (I know, I probably should have used Ross turnouts instead of the 042 switches). So one crossover (2 switches) gives me issues in either direction, but the other crossover arrangement seems to be ok. Visibly, I cannot see any difference between any of the 4 switches.
3. The engine will sometimes go through the switches fine if it is not pulling any cars, or maybe just one car. But when I start adding cars (heavier passenger cars, especially), that's when it will derail all the time.
4. There is no interference with the pilot truck and the first set of drivers, or the frame.