Hi Peter,
I have 4 MTH locos, 3 O gauge and 1 HO. I think they are terrific, with all the smoke, lights and sound operating, they are quite spectacular. I recently bought myself a birthday present, a new Premier O gauge Big Boy 4014. Postage to Australia costs about $AUD300 so I was horrified when it died last week. As in your case, factory resets etc didn't work, but then I found the problem. The connection between the loco and the tender had come loose, I pushed it back up into place and bingo! - one all smoking, all dancing Big Boy was back on the rails. The horror of an inconvenient and expensive warranty return vanished like a bad dream.
So there you go - don't forget the loco/tender connection, it may look OK but if the connection isn't quite there, the train is dead. That may not have been the case with you, but I offer this as another MTH owner.