Hi Dan,
I get these posts on a weekly digest, so just saw this today. I had the same problem with my vintage 397 coal loader and solved the problem as follows (credit given to sources as noted):
1. First, be sure to cover any openings on the beam with scotch tape or masking tape. See photo of outside of beam and under the belt. Read this little tip in "Toy Train Repair Made Easy" by Ray Plummer.
2. I can't locate the thread on this forum, but I'm sure I read over a year ago the recommendation to purchase aquarium gravel at Petco, and a cheap, plastic collander to strain out the small pieces of coal. I purchased both. I attached a photo of the collander, and drilled out the bottom holes to the size I wanted as suggested on that thread. The smaller pieces represent what went through; large pieces are what I use on the 397 without jamming. Penny added to show reference.
3. I would also suggest to replace an old conveyor belt. After I did the above and then had some belt slipping, a new belt solved that problem.
And BTW, I have several vintage Lionel operating accessories that need constant attention - but the grandkids just love 'em!! I have fun with them as well despite their weird scale size.
Hope this helps.
Michael