Got some "big shop" time on Saturday. Started tooling for new, smaller gears. If they run OK and then test OK, both of which I expect, they will allow for even smaller power wheels and even lower chassis heights. Then Sunday I started tests on a new, smaller motor. So far so good but this is the limit, I think. It may have some application like an N scale Fairmont speeder but I really won't know until it tests out for at least 500 hours, hopefully over 1000 hrs. The motor in combination with the new gears and their ability to have smaller drive wheels, if all works out, might get as much as 2 more mm off the height, under 7mm off the rails. Maybe a narrow gauge Z scale (Zn3?) will be doable at some later point.
Also, the new primary reduction drive has over 500 hours an it now and has been running flawlessly with NO indication of wear. I'm really happy with that as it is a total "in house" piece now, no special vulcanized parts.

Got another 25:1 gear reduction in the process. Wasn't really needed but I'll always take that plus I may be able to use that down the road to
maintain my current gear reduction in an even smaller chassis. It's all good.
But I'm still proceeding with what I've got planned for now. It's a LOT of work but the progress is good now that I've got my home machines humming.
