As strange as it may sound, the "lighted caboose" thing is REAL for MTH operation with a Lionel (in my case a CW-80) transformer.
Before I attached the Lionel lighted caboose, all I got was a partial bell, some engine sounds, clanks and clinks and no MOTION no matter what I did -- I was ready to send my new MTH GP-38-2 back!!!
Then there came the LIGHTED caboose -- you wouldn't believe the difference!! After reading the attached suggestions, I installed the LIGHTED caboose -- and wow!, like magic, the engine operated as if there had never been an issue -- direction button produced forward and reverse, full train sounds, horn when in directional mode; it was amazing!! The only thing I can figure is that the sine wave from the Lionel CW transformer is not "normal" for MTH operation and the addition of the lighted caboose (or other lighted car) modifies the sine wave to MTH requirements sufficient to permit normal operation.
MTH engines with Proto sound ARE complex devices, but at least now I'm keeping the engine.
Wayne
I have tried the "add a lighted caboose" solution to the problem of running (sounds, horn, bell, direction control) trains with a Lionel CW-80 transformer and I have now found tha it works with newer Lionel, Williams AND MTH engines -- they ALL worked properly when pulling a lighted car (caboose or other lighted car). Really helped solve operational problems.
And it is SO simple!
There are a number of folks that simply connect a light bulb across the track at strategic points to solve DCC issues. There is also a custom made filter that you can add to the layout in a few places that won't draw any current, but will address the noise issue on the signal.
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