Engine runs only a full speed and whistle never stops.

I would suggest trying to find a different transformer to try running the engine.  Then you will see if the problem is with the engine or the transformer. My guess is a transformer problem. 

I would try swapping the wires on the transformer first.

Doug

 Buy larger curves. 

  That is very close too much voltage for modern locos (20v), be careful. Check the right terminals are used. It does not have a common ground, so dont mix track and acc. power.  Run the acc. off one or the other.

   Is it used alone? If not, you likely need to phase the additional transformer to the first one.

Asuming the connections all right. The whistle blowing non stop indicates a constant dc (or dc offset) is being produced. That is a solid state transformer so there lots of internal components that could cause the dc.

Some electronics do have a shelf life of sorts; capacitors mostly, and that was a bad era.

I would try and take the train to the closest LHS and see if it runs ok on their test track. If so, the issue is more than likely the transformer. There are a number of budget priced transformers that you should be able to pick up at your LHS with their guidance, along with maybe an accessory or two and another train for your grandson.

   Over voltage may have done the engine harm, so checking the loco isnt an awful idea. However 10v if "off" indicates a transformer issue, plain and simple.

Use the meter on it's dc setting too and see what you have on the track.