The DZ126IN worked fine. Unfortunately, it needs to be installed "upside-down".
Usually trains that accept a NEM651 decoder expect that Pin-1 will be on the right if you are looking at the decoder from above with the pins oriented "up". This includes Fox Valley and Bachmann engines. This engine, however, expects Pin 1 to be on the left which means the decoder must be turned over. The pins are soldered in such a way that if you install it this way it will be canted up and away from the mechanism. However, you can bend it a little and it will easily fit under the shell even if it is sticking up due to their being plenty of space inside the shell.
The controller works great, but the light in the dummy engine will be perpetually on in white/forward mode unless it also gets a decoder. Fortunately the DZ126IN is pretty cheap.
One small quibble with the model is mine came missing one draw-bar. I will be contacting Kato customer service (which is always excellent) to get a replacement.
The engine runs very nicely and the detail on this set is excellent. I cannot run the entire set yet as I am missing one drawbar, but for European Passenger set fans, this 10-unit set is going to be a winner.