Thanks again. Took the system back to the dealer (Kleins in Baltimore). He said the receiver was bad and replaced it. The system is up now although our old track has some shorting problems. I think we have it under control  now and look forward to better operating sessions.

Thanks for all the replies. We will check them all out. There was no indication of low batteries and the signal strength was showing as strong. We will check for the AC current and will go back to the dealer and see if it will work there.

Just spent all day trying to to get the system to operate. Followed the steps out of the box. Attached the receiver to the control box, the power cord to the control box and then plugged it in to a live wall plug. Immediately both diodes began flashing quickly. Then turned on the transmitter. The screen became active, I pushed the stop button and the diodes continued to flash. I had the power leads attached to the track and the locomtive that came with the set on the track. The screen indicated the default loco, #3, but nothing happened when I applied throttle. Checked the track with a meter and the leads coming out of the power pack and there was no power at either location. Has anyone experienced similar problems? Myself and an engineer could not figure this out and the instructions included with the set are really poor. Now the diodes continue to flash as soon as I plug the transformer in. The transmitter is only inches from the receiver, I even hit the stop button and waited two hours. I am about to return the set to the dealer.