I got a good deal from a coworker several years ago-- $20 for a Kato HO scale NW2 locomotive. He was modeling the Transition Era, when steam was phasing out to diesels. Since he had dropped this one, and some parts were ruined, and deciding he had too many diesels anyway and that adding a decoder to this model was trickier than he was ready for, he made the offer to me.
I did some internet research on decoder installation. The experts agreed that the locomotive has excellent operation, but a smaller N or Z scale decoder would fit, and lighting the cab end required particular attention.
Having moved from Chicago to Madison, WI, and read some local history, I discovered the Chicago Madison and Northern Railroad. It was a short line from 1980 to 1982, and would eventually become part of the successful modern-day Wisconsin and Southern Railroad. A quick history is on the Illinois Central Historical Society page
HERE
A friend of mine worked on that railroad, and his son has gone into the decal business, so NW2 #201 was a perfect fit for me! Its sister unit, SW7 #202 is still running in this scheme near Harvard, Illinois to this day, for the Chicago-Chemung Railroad.

So, backstory finished, with the shell off, the Kato unit looks like this.
Kato NW2 guts by windysean, on Flickr
Kato NW2 guts by windysean, on Flickr
There is plenty of weight there, leaving little room for the decoder. The electrical pickup from the wheels is transferred to the frame halves, similar to a Bachmann Spectrum locomotive. The motor power comes from wipers to each frame half. The couplers are housed in plastic mounts to maintain electrical isolation.
To make room for the decoder, I cut out part of the frame. The TCS site I read from suggested a pocket above the motor, but I didn't have appropriate power tools for the task, so I used a hacksaw and cut off the front corner of both halves.
CM&N NW2 Kato loco-- decoder added by windysean, on Flickr
I used electrical tape to isolate the motor and its wipers from the frame halves, and soldered the gray and orange decoder leads to the motor wipers. I soldered the black and red decoder leads to the bottom electrical pickups (see the brass along the bottom edge of the frame). Note also that I cut shallow trenches in the frame for routing the wires, so the shell wouldn't pinch and damage them.
I wasn't excited about calculating the required ohms for the LED lights, but I bought some with resistors included, trusting the manufacturer to know what I needed. Here, I have installed the front headlight. Since the rear headlight had to be stuffed into the cab roof, I skipped it altogether and just removed the factory lighting there (and especially its electrical pickups too).
decoder and new headlight complete by windysean, on Flickr
Then, I started on the paint. The internet provided several photos of 201 and 202 and other CM&N equipment, but the photos were all in different lighting and varying quality, so the color shade wasn't certain. I consider that a green light to go ahead and choose what's best for me. With pictures in hand, I went to the store and bought Testor's Gloss Red at the hobby shop and Rust-Oleum Gloss Merlot at the hardware store.
Testors Gloss Red and Rust-Oleum Gloss Merlot by windysean, on Flickr
Having shared what photos I could find with my decal-making friend, he created a set perfect for my project.
CM&N decals by windysean, on Flickr
CM&N decals by windysean, on Flickr
When complete, an overspray of Testor's Dullcote sealed the decals and knocked down the gloss of the paint.
reassembled and fixed tread by windysean, on Flickr
During the decaling I reminded myself how tough it is to get pinstripes straight, but at least they hide the earlier struggles I had getting the paint edges straight too!
I replaced the broken end parts with new ones ordered directly from Kato's customer service-- my experience with them was great! I needed a new coupler bracket and while I was at it, I bought the correct stacks for this phase too.
Here's how it looks complete!
CM&N loco final by windysean, on Flickr
CM&N loco final by windysean, on Flickr
CM&N units final by windysean, on Flickr
As you can see, I made a caboose from prototype photos too!
Thanks for looking.
-Sean H.

Sean,

Fabulous work! Thank you for the detailed account of your process.

Man, they look great together. Yeah, I don't like pinstripes, either. You made them conform to your will - good work.