What's the exact Lionel number for that unit? I don't think the module will have the larger triac for a smoke unit, but I'm not sure. Also, if it's disconnected, it could be because it was already dead. Does the dummy have any antenna for the TMCC reception? Can you post a picture of the board?
ERR makes the MiniCommander EX for dummy units, it lists for $34.95, and Boxcar Bill here may give you a bit better price. It will do all you desire and may be the path of least resistance to get the dummy working.
From the description on the ERR site.
The Mini Commander EX has a full complement of outputs for supporting dummy engine applications. Outputs feature support for directional lighting, coil couplers, ditch lights, and a re-configurable output for strobe, smoke, or cab lighting. Additionally, serial signals are output for sound systems.