Thank you for your explanation.
I've experienced all the symptoms you have described. I took the tender shell off and inspected the tether connections (OK). The right-angle tether plug is suspect. I tried to get the boiler shell off but only succeeded in getting it halfway off...too much wiring balled up and jammed into the boiler shell. The receptacle pins look straight, but the receptacle appears it might be too recessed to completely receive the tether plug.
I was able to reset the engine to factory defaults, but the engine still won't go into forward or reverse. I have a BCR installed instead of a battery and it registers 100% charged.
At this point I'm seriously considering finding a Williams reversing unit for steam locomotives with whistle/bell and replacing the whole PS2 unit.