Hello, I had exactly the same experience with a CW-80.  On another forum I found the "solution": You must reverse the polarities so that the transformer's track red connector goes to the track outer rail, and the black goes to the center rail.  Then (1) The transformer's accessory black connector is the "hot" connection to the accessory.  (2) The wire from the "dead" outer rail of the insulated track section connects to the activation terminal on the accessory.  (3) If the accessory has a light which is constantly on (e.g. the 145 gate man), this connects to the transformer's accessory red connector (which is electrical "ground").  ((3) Does not apply to the crossing gate which has only 2 terminals.)

The only catch is that the bell & whistle buttons are reversed, i.e. pressing "bell" blows the whistle or horn, and pressing "whistle" activates the bell.

If you try this and it doesn't work, you may have a defective CW-80 as some were manufactured defectively.  Lionel will replace those (according to the forum I read).  Good luck!