Bill, I have not seen that setup in a steamer, but there must be at least two wires coming from the wheels to the motor. It sounds like the tender is out of the equation as far as pickups go. If you have room in the locomotive for the LM, you will have to find the two track pickup wires, cut them midway between the wheels and the motor, and connect them to the red and black wires on the LM harness. Then connect the orange and black harness wires to the loose ends of the motor wires.
The white and blue harness wires connect to those long, stiff wires that go to the bulb.
I doubt there will be room for a speaker in the loco, but if you want sound, you can mount the speaker in the tender and run the brown harness wires to it.
If there is not enough room for the module in the loco, you could put it in the tender, but you would have all the wires running between the loco and tender, which might not look too good and may cause the tender to derail frequently.
If you are able to pull it off, please post some pics.