My opinion - utilize some of the folks that speacilize in ZW or postwar Lionel transformer repair and have them look it over very carefully. Yes, it will cost to ship and return ship, plus any repairs, but to me that is alot less expensive than shorting- out your layout or worse yet blowing out boards on a very expensive engine.
I bought a KW from e-bay about 3 weeks ago. It arrived with broken handles. I wanted the thing, so I ordered parts and am having a friend check it out thoroughly. He is very expereinced repairing any train item for any brand. I am glad I did as the seller claimed the KW was serviced by a retired but experienced Lionel store owner. OK, but my firend has found plenty of shrotcuts that were done by the seller/his retired Lionel store owner to get it to work well enough to pass the sniff test. For example, the rollers worked, but had little life left in them. Original cord (although no exposed wires, why not just replace the darn thing??). So, although I am probably investing another $30 - $40, and probably would have been smarter to just buy it from the gentlemen's who has the ZW web site (linked in an earlier post), I am just glad I had it checked out.
My lesson learned: buy from folks that are recommended here because 99 times out of 100 you will get good advice and in the 1 instance where it might not be a good unit, the seller will probably make it right.
Since you, like me, already invested in the e-bay transaction, I highly recommend having it serviced by someone that is experienced with this brand and type of transformer BEFORE using it.
If you live in the Washington DC area, I can recommend an excellent place to take the transformer for repair. If you want to mail it to him, I am sure that is do-able. Contact me off line via the e-mail in my profile and I can hook you up. Or just go with someone else that may be closer and recommended by a forum member. Good luck.