For what it's worth, I'll post the fix for anyone else who may search for this topic.

I finally got around to opening up the engine today to have a look. When I inspected the unit and manually moved the wheels, I noticed that the smoke lever arm never appeared to move. Somehow the lever arm was not in the proper location and not pushing on the piston to make the unit chuff smoke. I suspect the unit was dropped or jostled over the last 25 years along the way. The unit was smoking well enough to amaze my 3 year old! Thanks everyone for your opinions and advice!

Hey all - My kids were gifted a 25 year old train set, and unfortunately when we set it up this year the smoker unit doesn't appear to be working, or at least working very poorly. I was only able to find Bachman fluid locally, and I can't get it to smoke. Only very small wisps. It's a Lionel 2 6 4 engine with an 8516-50 smoke unit.

http://www.lionel.com/media/servicedocuments/151-8611Complete.pdf

I've done some searching about smokers online, but I'm not entirely sure what to do. What do I need to do to diagnose / fix this? Should i search for a replacement smoke unit (same part number), should I rebuild the smoke unit (new wicking material, etc...), or does someone make a "replacement" unit that would perform better than the stock unit and still fit in this engine. My two kids would greatly appreciate any help you can provide. Thanks!!!