John here's what happened with these...
In an attempt to get better slow-speed performance, Lionel changed the worm gear on the motor shaft from a triple threaded "high-angle" worm, to a double threaded worm with a more conservative pitch. To save money they did not also change the worm wheel in the truck block.
The die-cast metal motor mount which keys the motor into the truck block was not spec'd or cast 100% correctly so the mesh is off. This causes friction and high current draw. Because this was considered a low-cost locomotive, I don't believe that a replacement motor mount was ever offered* But I heard that some repair centers had success adjusting the gear mesh by inserting a cardboard(!) shim to set the motor at a slight angle.
*Because Lionel's products tend to evolve over time, you might be able to figure out what the "next generation" of this loco was. Take a look at the LionChief FT from the current catalogue. (Lionel's website has exploded parts diagrams for most of their locos.) If you purchase motor mounts for a newer model of the same loco, they might have the changed geometry necessary for a correct gear mesh. Sometimes you can tell because the loco's product number is the middle digits of the part number.
Rockyshores, you have a few choices.
1. You can keep running it the way it is. How slow is it? (How many feet does the loco travel in one minute at full throttle?)
2. If you're handy you can try to shim the motors yourself and see if that improves performance. I would use metal shim stock, not cardboard which will compress over time. It shouldn't take much, maybe less than 0.005"
3. Since your profile says you live in NJ there should be a few Lionel authorized service centers within driving distance. You can take the loco to one of these (along with a print-out of this thread) and see if they are familiar with the problem. They should be able to correct it for you. If you're not handy this is the solution I recommend.
4. You can send it back to Lionel for an out-of-warranty repair.
This loco was made at point in Lionel's history where in the face of stiff competition they were trying hard to improve performance, but didn't have the budget, or were unwilling to commit to all-new tooling. Once corrected it definitely has smoother slow-speed performance than earlier models. You just have to take some extra steps to unlock its potential. -Ted