I have a NYC Hudson, and I noticed that the headlight is always on. I pulled decoder out of the tender and put it into a Walthers F7, and the headlight operated normally. I have a TCS non-sound 21 pin decoder on the way, but I suspect that there's something not quite right with the wiring in the boiler.

Before I go ripping this engine apart, does anyone have any experience with this, or any hints that they can provide?

Mr. Bachmann, is this something that your repair department has seen, where you can give me any hints as to where to look for problems?

Many thanks in advance.

Does F7 dim the headlight? Is it on full brightness even in reverse?

I don't believe so, but it's in pieces right now so I can't easily check. Yes.

I can confirm it's not the decoder because the decoder works just fine in an F7, and the decoder from the F7 is unable to turn the light off while in the Hudson.

After cutting power to the track and removing the decoder before the capacitors drain, it's also still on.

Why don't you just call the service department?  They will likely replace the engine.