[SEE the my most recent post below for the update.]
This is pretty odd. I have a Legacy E8/9 A-A pair, which was working fine until I put it back on the track after a couple of months on the shelf. Now the forward engine starts up in conventional and does not respond to Legacy commands - unless I remove the body shell! With the shell detached it will respond to CAB2 commands; with the shell on it will run in conventional with all features working via transformer control but will not respond to the CAB2. By detaching the shell I just mean unscrewing and removing it and putting it to the side of the track with all lighting wires and the antenna attached.
I can't see that any wires or the engine's switches are detached or binding. Any ideas what gives? The track setup is just an incomplete loop at the moment but another Legacy diesel engine has no difficulty receiving the signal.