Neolube is conductive (graphite). If some got deposited on the insulating driver tire, that might cause a problem. You migth ant to examine that driver's rite under strong magnification. Although I wouldn't think the graphite would create a such a low resistance path to cause enough current to pass to cause sparks at the rail.
I have never seen the insulating tire to fail, but I have not handled very many brass steam locos. Maybe remove that driver from the loco and examine the insulated driver from outside and inside.