Lionel 6-31960 Polar Express smoke unit leaking
CN - I just happen to have one of these locos on my bench for some repairs. So I took the boiler off and took a close look.
The smoke units are pretty simple, but the assembly is a completely vertical assembly.
On top is a 2 piece zinc casting/chamber for the heating resistor and fiberglass wicking. The chamber is swaged to the steel mounting bracket. Screwed to the bottom of the mounting bracket is a plastic receiver/tube for the piston.
The plastic piston (which has a flapper valve to allow air in on the downstroke and closes for the upstroke to push air out the stack) which moves up and down inside the smoke unit assembly is actuated by a lever and cam from the front driver axle.
The lower zinc casting has two holes on the bottom for the air to enter from the piston upstroke.
If one separates the zinc castings (requires unsoldering the common wire from the resistor to the mounting bracket) on top one will see that where the two air inlet holes on the lower casting protrude about 1/8" up from the casting bottom. This creates a "small" reservoir for excess fluid not absorbed by the wicking.
If you overfill the smoke unit, fluid will simply run out the holes in the bottom of the lower casting, all over the piston, and out the bottom of the loco. I suspect this is the case in your situation since you imply the unit is "working" so to speak.
Note that over saturation of the wicking will result in low (to no) smoke production since this is a "conventional" loco and track voltage (and thus the smoke resistor) will be low or the loco speeds off the track. To get the smoke resistor hot requires running at ramming/launching speed for some period of time. There is no regulator in this level of loco to place a constant voltage to the smoke resistor.
These are not great smokers, but the smoke unit itself is a very reliable unit unlike some other locos that use a high heat plastic chamber that eventually distorts or melts if one does not keep smoke fluid in it or keep the smoke unit off.
The good news is most smoke fluids are versions of mineral oil that evaporates a bit and does not hurt the finish of the loco or its mechanisms (barring a dusty environment).
Short of disassembling it to dry it out, you can let it dry out naturally - could take a while - or you could run it on a bench at a higher voltage with the driving wheels up to heat up the resistor and evaporate some of the fluid.
Good luck!