Conventional Fine, TMCC sputters when runs

I'd check the antenna first, that's a suspect.  Otherwise, since it runs fine in conventional, I'd be leaning to the LCRU as the problem, it sounds like you're getting intermittent reception.  Do the lights flash when it's acting up?

Lights: no cab lights in TMCC, directional lighting operates fine in conventional.  There are 2 lights on the front truck, dim when acting up, bright when "taking off".  

Well, the usual steps probably apply, open it up and check all the connection seating and for any loose wires.

Lionel Supplement #31 has the wiring diagram for that locomotive, it might aid in troubleshooting.

Try re-programming, using code 6. Not reset

I think it is toast now. There was a pop and smoke. Every time I power it up there is smoke from the rear of the top board. I will see if I have something to swap with to test. I will write this all down for reference.  Thank you for your help.

Smoke is a very bad sign! 

OK, good news and a question.  I removed the burnt voltage regulator and it runs so much better.  I went to digikey.com and gave them the numbers on this part. 54AP  LM2575HVT  -12 P+ and they said they have it. So I ordered the part. Lets see what arrives but does  Lionel sell circuit board parts or just new boards complete?

What board are we talking about?  I don't think Lionel sells any parts, but I have repaired a number of TMCC boards.  That regulator is on the RailSounds 2.5 board, I don't know why that would have smoked and affected your TMCC.  I have a RailSounds 2.5 board if the actual sound chips didn't take a hit.  Of course, you could just use some other diesel sound chips if they are bad...

I can't believe it's making sound without that chip!

Here is the rest of the story, I took the sound board off, with the power to the track. As I moved the soundboard off the engine, the base of the chip hit the frame and pop.  That is where the smoke came from. There are 5 fingers on this chip to the RS board so I wiggled them off because the smoke caused me to turn the engine off before any other test could be done. I put the power on, no smoke so no shorts. I tested only TMCC movements, forward and back. Did not test sound, I will test tonight and report back and post some pictures. I need to learn the picture process.

I can assure you that without that chip on the RS board, there is no sound!  No need to test that, as the outcome is already certain. 

I suspect you already know this now, but you clearly don't do anything like this with track power on!