Thanks, Jim.  Removing the cap did the trick.  Turns out this is indeed an LC pi filter.  I agree that it is probably an attempt to suppress spurious RF from the motor.  I would even go one step further by removing the inductors and replacing them with a solid wire.  I am not sure what effect leaving the pi filter in would have on decoder output design.  This would require some testing that I am not set up to do.  At best, nothing would happen, but it may have some negative effects such as decoders with BEMF control.  It may filter the BEMF signal such that it is no longer as effective as it should be.

I have 4 Spectrum locos: (2) 2-8-0 Consolidations, a K4 Pacific, and a 4-8-2 USRA light, purchased about 5 years ago.  All run fine on DC.  They are apparently DCC ready (though Bachmann gave no info with the loco).  The tenders have a PC board with an 8-pin socket, plus a couple of inductors, caps, etc (anyone have a schematic?).  I recently converted to Digitrax DCC, and am testing locos on my new layout.  First problem:  I am testing non-DCC locos using DCC at address 00.  The 4-8-2 runs fine this way (as do many other locos).  The other three immediately cause the  Digitrax system to ring up a short circuit.  This is strange as all 4PC boards are apparently similar in design.  Any ideas as to why this would be?

This brings up the second problem:  I would like to install a DCC decoder, but am reluctant to try with no info.  Proto 2000's also have a DCC ready design but warn you to use different lights when plugging in a decoder.  Does the Spectrum design have similar requirements or can you just plug and play in a decoder and all is fine?

The more contacts, the better.  But this is really the wrong question.  The question should be "how do we get a reliable design"?  This loco, and the K4 Pacific have this cheesy pickup design.  Bachmann obviously realized this.  Compare this design to the 2-8-0 Spectrum Consolidation design.  Same plastic holder, but a new formulation of the contact strip.  This one actually stands a chance to work.  A+ for this, but an F for not making a retrofit design available that will upgrade the K4's and the 4-8-2's.  I haven't tried it, but the consolidation contact strip might actually fit in the 4-8-2.  This would resolve the problem.