Not having the book, I can only guess at what the circuit is, but if the LED gets full DCC track voltage across it, then the problem is you have fried it. An LED needs a dropping resistor 99.9% of the time (note to the other electronic types - if the circuit you hook the LED to already has a resistor, then it has a dropping resistor, doesn't it?). LEDs are current devices, not voltage. Yes they need at least a certain voltage, that's the rating given for them, but it's the current that controls the brightness. The relationship between voltage and current is probably he most critical thing to learn in electronics. Once you have that figured out it all makes a heck of a lot more sense. If you are suffering from insomnia some night, google "kirchoff's laws" and read one of the many explanatory web sites. This is the background on why dropping resistors are needed and how they work,.
At any rate, to use a typical LED with HO/N DCC voltages, you need about a 1K resistor in series with the LED to keep the current levels to a point where the LED will glow nicely but not burn out. LEDs also do not like large amounts of voltage in the reverse direction, which happens about half the time with DCC - I would recommend a type of LED called a bicolor LED - the version with 2 terminals looks just like an ordinary red or green LED but inside it is two LEDs wired back to back - usually one red and one green, so on DCC it usually looks somewhat orange. Also the polarity of these or even an ordinary LED used with DCC does not matter. The polarity of an LED used for DC or as lights on a DCC decoder DOES matter because an LED will only pass current in one direction, just like an ordinary rectifier diode.
--Randy