In following up my last answer I pulled off the body (again). I could not discover any scraping marks, or mis-allignment anywhere. And as previously described, in forward mode the screeching still started at step 12/28 and in reverse in step 3/28.
After a bit of running with screeching and stopping I did notice the stopping did not happen as per the momentum programmed in by me, but rather abrupt.
This did indicate the drive train was binding somewhere, so I decided to loosen the screws of the little bridge at either end of the motor, holding down the motor. Each of the screws I loosened initially by a quarter turn and lo and behold there was a change in the noise produced! Luckily these screws are pretty tight and by easing them back a touch more by just over another quarter turn the screeching noise had gone completely! It now runs smoothly in both directions, with the programmed momentum included!
I am now a happy FA2 owner and can actually hear the inbuilt sounds :-) :-)
Thanks again for the responses.

Thanks, guys. I will pull the body off and have a look for scrapes. I had dropped a drop of oil on the driveshaft either side of the motor already, but that did not achieve anything. I also had it running the best part of half an hour in either direction. This has resulted in being able to run forward up to notch 11 on the 28 step scale without noise. Backward it still starts screeching as soon as I hit step 2. It now does run a bit faster in both directions though, so obviously it did need a bit of running in at least, being a new unit.

I am in located in Australia. I purchased a NEW HO scale Alco FA2 with sound value from Trainworld about 6 months ago, but never took it out of its box till yesterday, as I did not have my new layout wired up untill a few weeks ago. I have an extensive fleet of Bachmann locos, with which I have not experienced any problems, but this loco gave the following problem as soon as I put it in motion: A severe screeching in both directions, reverse being slightly worse. I have oiled the worm gears on both bogies, but no change. Thinking the sound part might suffer back feed noise I turned off the sound, but the screeching remained the same.
Anyone have any idea how to fix the noise problem? It would not do to send the unit back to the USA for repairs, so I am looking for constructive suggestions how to repair this unit myself?
Thanks in advance for any positive response. BTW I also have a B unit purchased at the same time, which runs perfectly!
Regards.
Hank