I got lucky!!!!!!! But in the end, I'm confused.
Took it in and the tech checked the LED with an 'outside' power source and the LED lit. But not with train power. She fiddled around trying things, checking wiring and other things including running it with a Z4000. NADA. The only conclusion she reached was that the LED would come on but shut off as soon as the firebox glow light came on (I myself did not notice this). blah, blah, blah and more. She also noticed that the firebox LED and headlight LED shared one wire connection.
Out of ideas, she called her contact at MTH. He had her do a conventional factory reset with Z4000 and that cured it - it seemed. She at first told her contact her observation about the headlight being lit until the firebox LED kicked in. That didn't seem to cause any reaction from her contact.
While paying I told her I didn't get it, I did both a feature reset and a factory reset, both twice, and that didn't help. Then she shared that she also at some time pushed down on one of the pins and heard it 'click'. Why that didn't solve it instantly I don't know.
This is all very confusing. I think the timing of when she did things may have mattered too, like, for instance, if she pushed the pin as she was talking with her contact it would then seem that the factory reset did the trick.
I promised to come back here and report the cause. Wish I knew for sure. Either: 1) the pin that she pushed was the issue, or 2) a conventional factory reset does different things than a factory reset initiated by my remote.
John, yes, I noticed that a board right behind the smoke unit, where the headlight wires eventually landed up, had 4 or 5 components plugged into it.
I feel I should apologize since the final 'solution' is not obvious. Personally I don't care since everything works now, but in terms of coming in and reporting a 'solution', yes, I feel bad about not being able to do that.
As always, thnaks - walt