I have this exact locomotive and a neighbor also has one. Unfortunately for my neighbor, the gear in the blue circle appears to have fallen out and the shaft that held it is also AWOL/missing. I should have taken a picture at his house but here is mine to see if there are any repair suggestions.
The locomotive started running erratically since only one truck was working. He found the gear on the track and the gear box has an empty hole where the shaft for this gear would have gone. The shaft apparently fell out. Obviously, when the you know what hit the fan, the gear and shaft both separated.
The Lionel web site has no exploded view for this unit and no part details that I can find.
Before we tear the truck apart, has anyone had this happen or have a part number suggestion for repairs? Thanks in advance for any "pre operation" suggestions.
Here is the locomotive.