Lights blink 3 times and repeat

From the manual...

 

It will most likely have to go back to Lionel CS.

 

1 Main drive motor stalled.
2 Smoke 1 element problem.
3 Smoke 1 fan problem.
4 Not applicable.
5 Not applicable.

Marty is right.  You have a defective smoke fan motor.

Thanks guys

It could simply be that you over-filled the smoke unit and it has drowned the motor/electronics. Sometimes this will recover if you leave the smoke switched off for several days (About a week at most.). If you can spare the time, it may be worth waiting before you ship it off for a repair. 

Nicole's idea is certainly worth a try.  I've had one that was blinking 3 and eventually subsided.  But then again I got a smoke unit resistor indication a few weeks later that wouldn't go away.

My Milwaukee S3 did the same thing, found that the reservoir gasket was rubbing on the fan motor.