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Mike: It sounds like there was a short through the wheel, such as between a switch point and the stock rail, and the breakers didn't work. This can happen with DC, and was common in the "old days", when trains were often powered by a auto battery. It has become common again with DCC, if the system is properly protected. Sounds like the breakers didn't trip fast enough.
I have several of these locomotives...Why they did the wipers that way is beyond me... They are far more problematic than the cup & axle-end system used on Kato, Atlas & others.