D&H 65 your original post states a #1 fault code. I assume you mean it was throwing off 1 blink on the cab light flashing? (sorry if I am splitting hairs here). I only ask because a single flash of the cab light indicates a drive line issue (or in the case of a dummy unit, the hall effect sensor input is not functioning). The cab light flashes are as follows;
1 flash = drive line bind (dummy units, no hall effect input)
2 flashes = Primary smoke unit element malfunction (shorting or wrong resistance)
3 flashes = Primary smoke unit fan motor malfunction (too high of a current draw)
4 flashes = Secondary smoke unit element malfunction (shorting or wrong resistance)
5 flashes = Secondary smoke unit fan motor malfunction (too high of a current draw)
These fault codes can be rest by pressing AUX1 + 0 (although you can only do this 3 times). The fault codes are there to prevent burning out outputs on the RCMC (the most expensive part of the circuit). however, if you do want to risk burning out the RCMC outputs you can cycle power on and off and you can reset the fault codes 3 more times and so on. But be warned! If you keep this up you'll not only be replacing a fan motor or smoke element, but also an RCMC! (which translates into you can make a $15.00 repair cost $125.00 in parts!)
Probably the most common error code is 3 or 5 flashes. This can occur at 9am and disappear at 9:10am. It has a lot to do with where the armature is positioned on the brushes (inside the fan motor). When the RCMC output turns on and sees a current draw too high it shuts the output off and throws the blinking light code. Often times you can hit AUX1 + 0, then turn the smoke on again the fan turns on. In my experience this happens most frequently with the 11mm fan motors. The 15mm fan motors rarely cause the RCMC to throw this code. The problem is the larger fan motors do not fit well in applications where the 11mm motor was used (you typically run into issues where the 15mm motors hit the frame or the side of the shell/boiler). So its not just an easy swap out of a motor to correct the issue once and for all. I typically tell people to shoot a quick blast of compressed air down the smoke stack (and I mean a quick blast, otherwise you shoot smoke fluid everywhere!) this will cause the impeller to spin slightly and change the position of the fan motor armature, then the output of the RCMC runs the fan motor without an issue!
The corrosion on that motor does not look good, I have never seen that personally in all my years of tearing into the guts of a locomotive (unless the loco was subjected to a great deal of moisture, but then you would have rusty screw heads, rusted wheels, etc.) if its just the smoke fan motor and nothing else I can honestly say I have never seen that before! As GRJ said, its a simple inexpensive fix!
Sorry for the rant!
Mike