Works fine in DCC mode, and now in regular mode. Auto fireman was off, but the coal, water, and sand were enabled.
I had the engine placed right next to the water and coal source. I finally noticed that there was a huge difference in the way the engine acts when in the service area as opposed to away from the service area. Have no idea why. If I started the scenario after moving the engine to a mainline, boiler pressure acted as I would expect. If I started it in the service area, I immediately got the loss of boiler pressure.
The above may make no sense, but it is what happens, and it is reproducible. I tried the K-28 and got the same behavior.
At any rate, thanks for the advice, and thanks to togog for the great engines.