Every good story is a trilogy, and this is no exception.
I FINALLY figured out the problem!
The 1981 vintage transformer just didn't have enough poop to leave a mark where the engine was shorting out.
My new CW-80 showed up in the mail today, and after playing with the whistle and bell features on the Williams 44-tonner, I parked it on a siding and powered up the steamer.
ZZOT! Couldn't get the steamer across the problem switches for love nor money, at any speed. ZZOT!
I took the steamer down to the shop and cleaned the wheels and rollers. Back on the track and ZZOT!
Then I looked, and saw a nice little burn mark where the engine was shorting out on the switch... Right on the point of the center rail "diamond."
A bit of black duct tape on the points of all the switches, and the old UP 4-4-2 is chuffing around the track with no signs of sparking, arcing, or shorting out... Just in time for Christmas!
Now when will that Norfolk Southern Northeast Heritage set show up?