Martin,
Agree with Paul there. This is normal for a decoder to jerk forwards and backwards (very slightly) on a Programming Track when the command station is in programming mode, it reads the CV's of the decoder. If there is a short, the command station should shut off before the decoder lets out the blue smoke (fries). The majority of my decoders are ESU and also the Command Station 50200. By reading your comment, on it runs perfectly on DC but nothing on DCC, therefore this is telling me that the command station is not recognising the new address of the Lokpilot. Have you changed the CV address? If so, on normal running on DCC you would need to select the new address that you have changed from 3. Further, on DC, if the decoder is programmed to run on DC/DCC (it should be as it is a factory setting) it does not matter what address it is, so it will run. Try resetting the decoder CV08 to 08 the address would be re set to 3, then try and use the loco on DC track. Should be OK. Then try on DCC with controller set to address 3. Should be OK on that too. If all OK, then you can set address on programming track (or mode on controller) to what ever short address you want. Place on DCC track and select the address you have just programmed with the controller, all should be OK. Hope this helps. Note make sure no other locos are on DCC track when programming new loco (precaution or you could end up re setting all the locos on the track.)
Dave