There was a previous post by someone who had this same problem after installing a decoder, however they never came back and posted a followup as to how they sovled the problem or if they ever solved it. Sounds to me like a problem with the wiring of the circuit board. As for fitting, you may have to remove the upper piece of the weight. The DZ125PS is a smalelr decoder and might fit better, but the DZ143PS should fit, maybe with the weight removed.
--Randy
Modeling the Reading Railroad in the 1950's
Visit my web site at www.readingeastpenn.com for construction updates, DCC Info, and more.
Jim.
Here is a couple pictures of a TCS decoder in the N scale 0-8-0.
http://www.tcsdcc.com/Customer_Content/Installation_Pictures/N_Scale/Walther/0-8-0/Walther%20_N_0-8-0.html
Pete
I pray every day I break even, Cause I can really use the money!
I started with nothing and still have most of it left!