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I have a Premier 2-8-0 that also does this. Turn off the smoke and the lights stop flickering. Bill is right about the MUX board fix. I just leave the smoke off most of the time. Does not seem to effect any thing else.
There are a few things that can be done to fix this problem. If the first option of swapping the Royal Blue wire on the mux board with the Royal blue wire to the ps-2 board fixes it I could do this for you while you wait. I am down the mountain in Lewistown. The other options require a little more time and maybe ordering a couple of components from MTh. At the time I do not have them in stock.
Forest
Certified MTH Technician