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First step would be to try the B-U posts and see if it does the same thing. Might as well eliminate the whistle switch on that size. It sounds like the contacts of the whistle switch aren't providing the boost, or the shunt resistor isn't being switched in.
Just a thought, have you tested it with a different transformer? Does it run normally without the horn?
Sorry, I have no idea what you're trying to say in the last post.
Did you try any of the stuff I suggested?
The KW (and most other transformers) has a 2-step whistle/horn control. When you move the button or handle to the first position, the whistle/horn should activate and the train will slow down if you hold that first position. When you move to the second position, a bypass resistor is added that boosts the output so that the train will run normally. Are you seeing these two steps on your whistle/horn control? If not, the switch may be defective OR the resistor is damaged or disconnected.
Could it be that someone rewired the couplers for Teledyne activation?