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The 1361 is a very hot-button topic for PRR fans. Here's a sample thread from RYPN discussing the project.
http://rypn.sunserver.com/forum/viewtopic.php?f=1&t=24341&hilit=1361

From what I have read, there is a lot of emotion tied with this engine. Rather than doing a real assessment of the locomotive to see if it was feasable to restore, it was just restored to operating condition. From what I have heard, folks involved with the intitial restoration project were more interested in getting her on the road than taking the time to fix it the 'right' way. Those repairs probably did more damage than good. I have heard accounts that indicate parts of the boiler were so thin that a small hammer would punch a hole. It is luck that no one got hurt! I recently watched a video of the 1361 during the fall of 1988. There were a lot of steam leaks on that engine. Kind of scary when you think about it. Plus, the video showed a lot of slipping, without closing the throttle.

Then, the project got moved to steamtown, where it sounds like politics played a major role in the project. A new tender was built, a new backhead was fabricated, lots of new parts, and then there was this discovery that the crown sheet design has some issues. Apparently, the PRR design would be considered unsafe using hardware available today. So, that's where the project stopped. New crown sheet and firebox is big bucks.

Plus, there is the other issue, where do you run it? I thought the plan was to use Steamtown's shop for the rebuild, and then Steamtown would be allowed to use that locomotive for a couple of years before it was returned to the museum in Altoona. There's no where to run it in Altoona, no way NS is letting an old steam engine on their tracks. Steamtown seems to have lost its desire to run steam. Operating steam locomotives seem to be the exception there, not the norm. I'm not sure why, either. Again, its probably politics.

Mark
 
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