You need to disconnect the decoder before you test for a short on the frame- The decoder will cause a short indication. Disconnect the decoder and recheck.
I have one that is a Paragon 3 so I don't know if this will help but it is worth investigating.
When it was new it made it halfway around my mainline before it identified a track issue that I never noticed before and it derailed. After that it would only run a few feet before shorting. As I fiddled with it that distance decreased until it shorted out immediately.
It went back to BLI where they replaced the decoder and sent it back to me. I put it on the track and it again shorted out immediately.
Back again to BLI and this time they paid more attention to it. The report I received was that the drivers were shorting against the frame. They put some (insulated?) spacers in and sent it back to me. I haven't had the problem since.
I suspect that mine "pinched " the drivers on the bad track. You may want to check that clearance on yours.
Rick
I have had a BLI Northern for some years. The orginal QSI decoder died long ago and it was replaced with a Soundtraxx Tsunami decoder and has been running well. Some weeks ago it just stopped. I have identifed that their is a short ciurcuit across the loco frame. The tender appears to be ok but as soon as the loco is placed on the track the command station registers a short circuit. I have inspected each driver set closely and can find no evidence of out of place components but there is a circuit across the drivers and can see no reason for the two sides of the frame to be connected electrically. Anyone have any suggestions on the possible cause?