There really was no fix other then reading the manuals better, and operating the throttle more and more until I could figure it out. It was an operator problem and not an equipment issue (did I mention I also had a polarity issue due to a crossed wire). The good news is the DCC is up and running great. Some lessons learned:
1) The manuals may not be as clear as they could be. Read carefully several times and take each step one at a time so you don't get too confused.
2) following the instructions I ran a DC loco first on DCC to check the system. When the DC loco went to exit a reverse loop, the loco itself reversed. I thought something was wrong with the loop. Apparently, this is normal for a DC loco on DCC!
3) The red led lights on the digitrax PM42 normally indicate a short condition unless that district has been wired for reverse loop operation. In that case they indicate a polaritry mismatch which the PM42 will take care of automatically. I was interpreting the red led as a short on the loop which was wrong!!
4) Also ,it helps greatly to have several other folks at your side to trouble shoot the system. Two or three heads are better then one in resolving issues sometimes. Just like this forum where fellas can discuss things. Thanks for everyones help.
5) Now that I can see this RR operating on DCC, I am impressed with the potential for fun operation. My next task is to install my own decoder and speaker; figure out this CV stuff, etc. You will be hearing from me again no doubt
).