Engine now runs fine.
The break-in method seemed to work OK, but the next morning, [today]  the jerky movement was back.
I took Jonathan's advice, removed the plate, spread the wipers, and operation was fine after re-assembly. Note..one of the contact shoes that connect the wiper strips to the motor was off-center about 10 degrees, and I straightened this out.
Thanks one again.

Once again, thanks for the responses.

Jonathon...thank you for the time and trouble in taking and posting the extremely helpful photos and comments. If my current 'running-in' attempt does not solve the problem, I will give your method a try, it may well be the solution to all this.

ACY..thanks for the comment, but we switching layout guys can 'run-in' an engine.
What you do is drive a 1" finishing nail on the centerline of your track, hook the coupler to it, power it up, and let the wheels spin..I've had the little 0-6-0 on that for the last half hour, and it seems to be making a difference.

Thanks for the replies.
The 'run-in approach' didn't work, I also tried pulling and pushing the 0-6-0 back and forth with an MDT switcher. ( I only have a 12 foot long switching layout).This did prove there was no binding, the 0-6-0 wheels were turning fine.
I did try lightly increasing the tension of the copper wipers, but this only improved forward smoothness for a couple of minutes, then the same jerkiness returned.
I expect it is a wiper-contact issue, there seems to be a lot of sideplay in the wheelsets.....but this doesn't affect reverse movement. I am going to ask Walthers for a return authorization number and hopefully send the unit back for replacement.

I have just joined your forum, it looks very good.
I have a question or two regarding the new Spectrum 0-6-0 saddletank tank loco I just received.
It is Item 81811, a nice little unit.
The instructions advise that it can be run on DCC or DC.
I run only conventional DC.
It runs quite smoothly in 'reverse' [ cab ahead], but very jerkily in forward [boiler ahead].
Is this probably a case where a lengthy break-in period is needed, or could it have to do with the DCC possibly interfering with the DC ? If I need to get in and disconnect the DCC, I'd appreciate some instructions for this.
Thanks and best regards.