Lionel pre-war 1662

I had a similar problem with a prewar Lionel loco.  Holding it at eye level on a single piece of track and looking at the end, I could see that the collector was down too far, as you have surmised with yours.  In my case, the fiberboard strip holding the collector had drooped.  It was easy to bend it back into place and now the loco runs like a champ.

I don't want to sound too stupid - but what is the fiber board ?

no stupid questions...we all had to learn (I still am). The fiber board is what the slide shoes attach to.

Way to bail me out Steamer!    You noticed Ron's question before I did.

That also happens when one of those tiny tabs that fit into slots at the bottom of the frame slip out or break off. The fiber board gets brittle with age.

It also happens if one (or more) are overlooked when putting things together after repairs. That is easy to do. I speak from experience.