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I have a question:
Is that a switch your engine is loosing signal on? If it is, The center rail contacts of the engine may be hitting the center rail insulators  of the switch at the same time. Try another longer engine and see if it still happens. I dont think you have a signal issue, You may have a voltage issue. Get a ruler and measure from the center to center of the center rail rollers on the engine. Then take that measurement lay it on the center rail and slowly slide it along and see if at one point the measurement falls on 2 insulated places on the switch. And then one last thing, either check continuity or voltage on the center rails of the switch. Hold one probe at one end of the switch on the center rail and move the other to each section of the center rail till you get to the other side. There should be continuity all the way through. If you do the voltage setting, hold the black probe on the outer rail, move the red probe from center section to center section. You should have voltage all the way through.
My project car I'm building would cut out everytime it would passover the multiple O-60 switches of my yard. Once I removed them and added O-72's it quit, because the O-72's are longer.
Just my $.02. Good Luck.

Last edited by Jayhawk500

"If I hold my hand over the section of the engine showing the number, the blinking stops."

That implies that your hand is attenuating the (overpowering) track signal radiating from the elevated track and other sources.  Try repositioning your ground plane wire directly over the engine.

Also make sure the ground plane wire is connected to the electrical outlet ground or pin 5 of the Base's serial connector and not somehow shorted to the track common (outside rails).  You want a solid ground plane signal in that wire.

If the engine works OK on track away from the elevated track, I doubt an engine reset would solve the problem.

@cpasam posted:

John,

I implemented your idea, but so far no change. I will keep trying. This is not rocket science: there has to be a solution.
Charles has suggested a factory reset of the engine and said it’s easy to do.
Can anyone tell me how to do that?  Is there any downside ?

Thanks to all.

I found the instructions for the factory reset in the owners manual that came with the engine.

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