2-Rail Question

Your axle gears are stripped.  They can be replaced, but unless it is a newer truck block with removable axles, it is a difficult job for a novice.  Sell it, and get what you want.

They are basically the same mechanically as the 3-rail, just different electrical pickups and wiring.   

 

2 Rail is generally set up to run on DC rather than AC.   I assume your ZW is an AC transformer.    Get a bridge rectifier and hook the leads from the transformer to the A and C pins and run wires from the + and - pins to opposite sides of the wheelsets.   

 

2 rail pickups up from opposite sides of the locomotive and with DC direct, does not require any complicated e-unit type device for reversing.   Simply reverse the polarity on the tracks/wheels and the direction is reversed.   My guess is this loco has/had DC motors.   nearly everything does anymore.

 

It is strange that it would have stripped gears.   Usually these MTH locos have the gears on the wheels on one side of the truck.    You should be able to see if the axle gear is stripped.   Also is it turning?   

 

If it has the drop plate on the bottom of the truck, you could take that off and see if the worm is loose on the shaft.

I have never seen the spur gears damaged.  It is the one you cannot see - the one driven by the motor - that strips.  It takes literally years to strip it, so this has to be a well-used model.

 

True - it is trivial if the axles are held in by a screw-on plate - the modern design.

It might be better to post this in the 2 rail forum.  I have two 2 rail locks that do not spin as freely as you describe.  A bridge rectifier is the simplest way to apply power.  There was a one page piece in CTT years age that described a project that created a control box that permitted the user to easily switch between DC and AC power.  I use that on my test bench with a LW transformer for power. It could be something as the gears being out of alignment.  Good luck.