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Lionel lists this as non-user repair, but since nobody else has responded I'll give it a shot.

First, turn the engine over and place it in a firm but cushioned support/cradle - two rolled up towels side by side can work - so that you don't damage the topside of the engine.

Second, remove the screws holding the shell to the frame - usually 4 -6 of them. Make sure you get them all - some can be partially obscured by the trucks.

Once you are sure all the screws have been removed, start gently  twisting and lifting the shell off of the frame - no major strength moves here - until you can feel the shell start to separate from the frame. Don't force anything - you may still have a screw in place. Don't try to move it a lot - there will be a few wires connected to the shell from the frame that you don't want to break.

You should be able to see wires going from a board on the frame to the headlight area and there should be a small board there. You may need to disconnect other wires and connectors in order to get to it - remember where they go and their orientation. I would recommend that you take pictures with a cell phone as you go along for future reference when you re-assemble.

You should now be able to see the headlight LED mounted on the board and probably a few others - marker lights, etc. You should be able to gently remove the board by unscrewing a small screw from its mounting location. At that point, you will have to unsolder the two legs of the LED from the board - not sure how good your soldering skills are, but be careful not to burn any traces or other parts.

I didn't check to see if the LED is available from Lionel but, if not, it should be readily available on the internet from a variety of sources. I'm guessing it is a 3v bulb, but check. Solder the new LED in place and re-connect the electronics. Before putting everything back in place I like to test it by hooking up a power supply or transformer to the train through the pick-ups - not directly to the LED or board because you will fry the bulb.  

Re-assembly is the reverse of dis-assembly - just make sure there are no pinched wires, anything crimped or faulty connections and everything is tucked inside when you screw the shell back to the frame.

If this is all a little too much you can always send it back to Lionel or take to a local LHS that does repairs.

 

 

Also, it is highly unlikely that the LED has burned out after one season of use. Chances are something has dislodged internally. 

Since it is probably beyond warranty by now, someone can poke around inside and look for the obvious cause. If you have a repair shop nearby, a qualified person could also take a look, but it might be a while before anyone could get to it. 

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