Issue alco 2-6-0 dcc/sound

[GtrsnTrains]

Got this unit new around the 4th of Feburary, and I've had an issue I've been trying to track down.  I haven't run into this problem doing a Search on this forum, so maybe I'm the only one.
I've noticed a slight lift off of the rails from the middle left (port, not starboard) side of the loco.  It is enough that in the 'up' postion I can fit a razorblade under it.  There is that kinda gap!  This is causing serious traction problems on a grade, and an annoying but slight wobble everywhere.  It kind of catepillars along, slight but I notice it because it's mine .  If a car is pulled behind it you can see it better, even on level track.  It doesn't like to pull a single car up a grade- mine are at most 1.5%, but were planned at 1%.  Even with a run from 5 feet away it starts slipping after 8 inches, and the grade runs up for another 4 feet.  I set a 1/4 oz weight in the cab floor and set some washers on the smokestack to test, and put some BS on the wheels for some grit, but the slippage remains.
At first I thought it was an off-center wheel axle causing an egg-shapped rotation, or a bit of flash, but after numerous observations on its back with the bottom plate off, and lifting the drive assembly off to observe just the one visible gear, I've concluded all of the rods, axles and wheels are fine. 
Also, and this is important I think, if you kick it up to speed step 2 or higher you hear a 'plastic' sounding rattle.  At first I thought this some loose plastic part (the shell or cab maybe) but couldn't find anything loose or that would stop rattling after a little finger-pressure.  On its back, with the bottom and drive assembly off the gears, the rattle is still there and I was able to listen carefully to pinpoint it to the motor area.  So with the motor turned off, I took my small screwdriver and touched that visible gear (00K02 on the .pdf blowup I believe) and it has a lot of lateral movement on its axis(side-to-side, not forward-to-back).  In other words, it is not firm on its axle, but twists on its axle.
Not sure from the blow-up diagram what holds those two gears, and I haven't been brave enough to take off the shell and take apart the two halves and have a look at the two gears (00K01 and 00K02 I believe), but I do think something in that area is causing a gear to spin oddly, thus causing the drive assembly to spin oddly, thus causing my middle left wheel to lift off of the track, thus causing some severe wheel slip.
Whew.
Thoughts?

[Doneldon]

Gtr-

This sounds real mechanical to me. Can you tell if both middle drivers are centered and square on their axles? Off center should be
fairly evident if you examine just the bit of hub which surrounds the end of the axle. It seems to me that either driver being off center
could cause a driver to lift off of a rail. Also, drivers which aren't square on their axles can do the same thing. And, I can't help but
wonder if your drivers are out of quarter. I suggest carefully inspecting for these three possible problems and then get back to us. You
might have to send the loco back to Bachmann in which case you'll need your warranty card and store receipt for free service.
Otherwise, you'll need to send $25 along with your model.

                                                                                            -- D

[GtrsnTrains]

Well, today is my 45th birthday and it started off with smoke.
Took things apart and had yet another look.  Fiddled with two wipers and made sure they weren't catching.  Everything looked good except for that one gear that is visible with the bottom off.  I tried like crazy to get the shell off- removed 3 screws at the plug, pulled out the two 'wires' at the front, but could only get it to lift maybe 16th inch at the cab end.  Oh well, not to be I guess- so put it back and plugged things in and with the sound off, there was a noticable humm coming from the tender, actually from the speaker/decoder.  Odd!  She ran forward okay or rather as normal for her.  Then if I stopped and reversed direction, the sound quickly faded away and no movement.  Change direction again and nothing also.  Took a shut-down of the DCC system to bring it back on.  The speaker also started emitting startling garbbled sound clips.  Uh oh.  Unhooked the tender and just had that on the test track and there was smoke.  Dare I say magic smoke? 
R.I.P. 2-6-0

[Doneldon]

Gtr-

RIP Decoder, probably yes. RIP 2-6-0, probably not. Like toothpaste, magic smoke, once let out, cannot be forced back into its
container. But that does NOT mean the loco is toast. The odds are overwhelming that a new decoder would make things all better.
I suppose an LED light could be kaput but that's about the worst which is at all likely.

                                                                                                                                 -- D