I am reasonably certain that your engine originally had a headlight bulb on the end with the marker lights.
Someone may have removed the bulb and socket for the following reasons:
The wires from the bulb socket getting tangled with the motor bracket, causing derailments.
Fear that the bulb would get too hot, and damage (melt) the cab. (This can happen).
While the exact bulb and socket may not be available, there are plenty that will fit.
Lionel has all sorts of manuals and repair information on their web site:
http://www.lionel.com/CustomerService/
Here is the instruction sheet:
http://www.lionel.com/media/se...ents/70-8659-250.pdf
If you would like to see the service material, download the parts 1-9 of the service manual (all in one download), and see page 1-4, titled: Diesel switcher with 3 position e-unit.