Please read the post “K-Line Streamline Car LED Strip Lighting Conversion – General” first. This post details differences between that “general” procedure and the specific considerations of the observation car.
The observation car has a pair of wires that run from the connection end of the Streamlighting board to a grain-of-wheat bulb that illuminates the tail light that's located above the rear door of the car. On most roads where that light was white, not red, it was illuminated only for backup moves of the train. So that light might as well be deleted. Just disconnect the wires at the front end of the Streamlighting board, tape or glue them to the roof, or otherwise tie them aside, so that disassembling the tail end of the car can be avoided.
Note that the observation car’s red side markers are NOT illuminated. The nature and means of attachment of these pieces is such that placing an LED inside them requires drilling holes in the card side and partially into the marker piece, which are challenging tasks that I chose not to undertake.
Those interested in ultimate realism might consider installing one of the low-power command auxiliary controllers for the sole purpose of locking the state of the rear white light to the direction of the train locomotive.
If your car is of a road that used red light at the top of the car’s tail end (CB&Q, GN, among a few others), then opening up of the rear end of the car will be necessary. A red 3mm LED should be mounted in place of the grain-of-wheat bulb and wired to the contacts near the tail end of the LED strip, via an appropriate current-limiting resistor (typically 1.5K to 1.8K Ohms, ¼W). It need not be particularly bright.
Before opening up the rear end of the car, first check to see if all surface junctions at the tail are tight. On my car, the interior post that holds the long screw, from floor plate to roof, was slightly too long and prevented the pieces from closing snugly. This caused much reassembly grief until the fault was identified and the post shortened ever-so-slightly. Next, secure the plastic skirt piece and rear door insert to the rest of the carbody, to ease reassembly. Scotch “magic transparent tape” works well for this purpose..
If you are going to insert a red LED at the tail, loosen the screw behind the rear coupler and lift off the rear roof piece. Try not to remove the screw more than a quarter inch or so from the rear skirt piece, as reinserting it can be troublesome.
There's nothing special about the LED strip - it's the same 7-triplet configuration used for other cars occupied by revenue-generating passengers. But do note that the Streamlighting board in the observation car has only two U-brackets holding it to the rib along the roof.
On the observation car, the regulator is best attached to the right side of the carbody, oriented as shown below, so that (a) the Streamlighting board can move around to accommodate the post at the rear of the car and (b) the regulator will remain clear of the vestibule-equipped end piece. This is shown in the following picture:
Next is a picture of the completed car, on the tracks.