Hi there,
Running erratically, no surprise, shorting, unlikely (but, possible).? I suspect the electrical path through the wheels, trucks and framework has oxidized and not conducting elecricity properly.? Mantua locos (as well as other cast locos) are very well known for this feechur.? You will need to check out and clean the electrical path throughout the whole loco.? My best guess is to start with the tender as usually that is where the problem is the worst.? In order to help diagnose this problem, remove the tender and maybe even the boiler and using jumper wires, like the kind you can get at Radio Shack, connect the motor directly to the rails, temporarily.? I bet you get a very smooth response.? If not, then the motor itself needs help.? I don't know if this is a can motor or an open frame.? If it is a can motor, then I kind of doubt you would have a motor issue.? If it is an open frame, then some cleaning and tuning may be required.? Usually it would be the brushes that need cleaning.
As to DCC, almost every locomotive made for DC can be converted.? If it is a can motor loco, then it is even easier as almost all can motors are already isolated from the case.? If it is an open frame, some of them will require insulating between the frame of the motor and the frame of the loco.? However, when converting to DCC, rule number ONE is to ensure the loco runs very well on DC first.
Good luck and regards, Vic Bitleris

Vic Bitleris Raleigh, NC