That 1980s restoration was a real debacle. PRR had run their steam hard, and with minimum maintenance, from about '52 on, so the #1361 was pretty tired when it was retired in '56. They then put it on a section of panel track up to Horseshoe Curve without a roof over it's head or any protection of any kind. In '85, Pennsylvania state assemblyman Richard Geist came up with the idea to restore the #1361 to operation, and Conrail was willing to help out and give it a place to run. It was moved off the piece of panel track and swapped out with an ex-PRR Geep that Conrail restored to Pennsy appearance and donated, and then moved down to the same Altoona shops that built and serviced it during it's life.
This was the tail end of the era where a lot of operational "restorations" were basically just "throw water in the boiler and make sure it doesn't leak". The #1361 was reportedly in pretty rough shape, running gear was pretty shot from the last couple years of operation, the one steam chest had a crack in it, and the years of storage hadn't been kind to it. It wasn't quite the "just throw some paint on it" restoration of some stuff from a decade or two earlier, but there was supposedly a lot of stuff not addressed. I also heard that it started out with a pretty good crew but there was one character who acted like he knew everything and really didn't know anything and slowly ran off a lot of the good crew and replaced them with a bunch of sycophants.
From those who hung around and still knew what they were doing, the #1361 never really ran right from day one. It had a bunch of issues with the engine brakes and the bearings always ran a little hot, but the know-it-all insisted that was normal and they would run cooler once they wore in. Conrail gave them permission to run over what was left of the old Northern Central, which had been severed by Hurricane Agnes and hadn't seen any real traffic by Conrail. The track was in pretty rough shape and they were supposed to be running at 10mph, although they were known to exceed that. The real issues started to transpire after they had a minor derailment on a switch in York, PA that dislodged the grease cake in one of the journal boxes for a drive axle. They rerailed the engine, but no one looked inside the journal and saw that the grease cake was no longer contacting the axle. They ran a few more trips on the Northern Central, but it was fine on the sub-30mph speeds they were running.
Conrail finally let them hit the mainline and while running at track speed it was setting off hotbox detectors left and right. But it finally came to a head when it had the journal box catch fire. Someone decided to use water from the tender to put out the fire, and the cold water caused the overheated axle to crack and that knocked the #1361 out of operation after about a year and a half of running. It was then decided to "do it right" and fully restore it, and Bethlehem Steel (RIP) even made three new drive axles and donated them for the effor in 1989 (and they even got the drive wheels pressed on those axles), but that restoration also turned into a complete debacle that stretched on for 30 years and was never completed, with a lot of work being done willy-nilly and a lot of money being thrown about.