If the gap bothers you, you could always install the motor assembly from a postwar Hudson, they all run on O27. Of course you would have to paint the sidewalls white yourself!
The 1970s smoke units contain a pair of contacts that momentarily supply full track voltage to the Sound of Steam circuit in the tender, triggering a burst of static. I don't believe the reed switch supplies full voltage, so be careful not to burn anything out. If you get it to work please post back!