JNichols,
Looking at your photos, your model is equipped with a K&D "universal wound field motor". These were the most common motors used for O scale before WWII. Universal motors have a wound field instead of a permanent magnet and require a bridge rectifier to be wired to them to run on DC power and be reversable by throwing the reverse switch on a basic DC power supply. I can see an original Selenium rectifier mounted under the rear of the motor. Without a rectifier the engine can be wired to run in one direction only on DC. If this was a model that came into my shop the first thing to go would be the Selenium rectifier replaced by a modern silicon rectifier rated at least 5 amps. Old Selenium rectifier have a tendency to failure and, I am told, can be dangerous to your health if they begin to smoke. A new rectifier will run you about $5.00.
The motor was called a universal motor because it can also be wired to run on 16VAC.
I have reworked several locos from this era and some collectors of such locos want to keep the original K&D motors in their model. This is OK but be aware that the loco will draw a lot more current with the AC motor and rectifier. I would expect your model will draw upwards of 2.5 amps with the original motor and rectifier. With a new DC motor properly set up you could expect the model to draw 1 amp or less.
As far as two rail is concerned, if you have a VOM meter or continuity tester, you should put the model on its back and put the test leads across the driver tires with the meter set on ohms. If the loco is insulated for 2 rail the meter should not indicate any continuity. If a reading is obtained your drivers may not be insulated for 2 rail operation. Same goes for the tender truck, pilot and trailing truck wheel sets.
Someone above said that Icken did not make outside third rail models and I am sure that is not correct because I have 2 railed some of them for others.
Your locomotive is certainly worth restoring to operation as it is a piece of O Scale history.
I am currently reworking a Scalecraft PRR K-4s that was probably first put together before WWII. I had to re-machine the drivers and all of the other wheel sets for 2 rail operation and I installed a Pittman can motor to power the loco through its original worm and gear set. It is a quiet mechanism! This model will stay in my collection and has quite a history and was given to me by Jim DeBruin in pieces. I think Bob Turner embossed rivets on the brass tender shell for a previous owner. Whoever did it they did a nice job! The Scalecraft K-4 tender did not have embossed rivets.
I have shut down my shop for outside work until September and this is the first model of my own to be worked on from my "to do" list.
I hope the above information is of some use to you.
Joe Foehrkolb
Baldwin Forge & Machine