Thank you for this thread. I belong to the Paradise and Pacific club in Scottsdale and I do most of the maintenance on our MTH engines. The Double AA MTH engines are very valuable to us because we have a 2.8% grade with 1080 degrees of curves per lap. We can only pull 3-4 cars per MTH motor on the layout (for hours at a time) and the double AA's let us pull 12 to 16 car trains around. As we are open to the public 363 days a year we put a lot of time on our engines. We currently have a slave board with exactly this failure mode and I have seen this before on other MTH engines. After reading this thread, I think we may try to bring it back to life.
I doubt that there is a problem with the motors, but here is a very simple and safe way to check them. We use a DC power supply with a digital readout on the volts and amps. Take the 5 pin motor plug with the two sets of yellow and white wires off the board (be it a master or a slave). Verify that the motor spins freely by hand while it is in the trucks in both directions. If it does not, take the motor off the truck and remove all the grease from the gears and motor shaft. Inspect the side gears as sometimes they will pick up a tiny rock. A tiny screw drive or a dental pick (which we like to use) works well for that. Put in fresh grease. Connect the power leads to the motor. Turn the amps up on the power supply but leave the voltage at 0. Then slowly turn up the volts and see where the motor starts. I normally use 5.0 volts to test them. Milliamps should be around 200 to 250 at 5 volts when running freely. If it is 300 or more, you may have a problem. With the motor in the truck, I check them at 5.0 volts and briefly at 10 volts. With no load, they are usually around 300 mills or so at 10 volts. Check them in both directions. If higher than 400 you may have a problem. If you don't have a fancy power supply, you can check the current draw of the suspect motor against a known good motor at some voltage between 5 and 10 volts. They should be within about 20% of the good motor.
The output of an MTH Transformer is AC so DO NOT connect the motor to it directly. A 25 amp full wave bridge works great for converting the AC power to DC. We use those all the time to resurrect or convert engines to Forward only engines for our Public Loops. They replace the electronic E units.
Again, thanks for the great tip on the FET!