If it's actually generating smoke, at least it's OK electrically (especially if you run DCC like I do, they
do eventually burn out). 
The smoke unit is designed to "wick" the fluid up from the reservoir; sometimes it can get clogged.

Fortunately, the "cure" is simple enough

- with the smoke unit operating, trying blowing
sharply straight down the stack. I've often found that will
clear the clog, & the loco will smoke
considerably better. 
You may also wish to consider trying a different type of smoke fluid.

Hope that helps!
Tom