Uncle ! I have never programmed a PS-1 engine before, and I just picked up a couple of diesels to run conventional. I wanted to have them run in the forward direction only and you need to program this. ( so simple with an E unit ) So I believe you need to change program level 40 from off which is 1 bell to on which is 2 bells. This I was able to do and went back into level 40 and it sounded 2 bells so I know I changed it.
I think next you have to lock the engine into a single direction (forward) and this is where I am not getting results. The book says to get in the direction you want to lock into and with the throttle set at 8 volts, press and hold the horn/whistle button. While holding button, throttle off and then release the horn/whistle button. Then in 2 seconds you should hear a short horn (do not get this) and then immediately turn the throttle back on. It should now be locked into forward which it doesn't do.
I am using an MTH 4000 transformer which is just powering a three foot section of track on my bench. Nothing else to interfere. What am I doing wrong ? I also tried to program the horn to be able to sound in neutral and got the same results - was able to change level 25 but not able to sound horn.