Its a pain to get the fluid down into the smoke unit on these lionmaster challengers. The smoke funnel makes a bit of a zig zag down to the unit. I recommend a good ten drops then gently blow into one stack and hold your finger over the other, then let sit overnight so the fluid can make its way down to the wicking.
These are notorious for trapping fluid in the funnel so a regular blowing into the stack will help performance.
If generous fluid, blowing and sitting overnight does not improve output, some of these locos had defective smoke unit regulators that do not allow the resistor to heat up properly.
If thats the case your beyond the warranty period, having said that, Lionel still does "out of warranty repairs" for a fee, or I imagine there are some knowledgable folks here on the forum that could help.
I suppose the PW transformer and/or conventional operation could be causing poor smoke output as well.