[Achto]

First off, VERY COOL Train engine!!!

Do the pugs seem to be fouling because of oil or too much gas?
Too much gas is a carburetor issue, oil fouling is an issue with the rings or cylinder.

How many hours do you have on it since it was submerged in sea water?
The sea water may have caused damage to the cylinder or rings. This could result in the early failure of either.

Are you fouling one plug or both? I ask this question because Vangard's do have a habit of throwing connecting rods.
I've had Vangard's that sounded fine but were low on power. Touch the head pipe for the exhaust to find one side hot the other cold.

 

[Achto]

Hi All, after removing the front cover around the flywheel to expose the armature’s it was quite clear the probable cause of fouled plugs, it is amazing that the engine ran as well as it did, all new parts will be ordered and replaced

I agree with @FrankIII, I would just clean those surfaces up before I threw new parts at it. I've seen engines run well with those parts in worse condition.