A: Peter, I’ll venture that this could be done only with great difficulty.
The horn in the station is the same as the one used in all Lionel diesels of that vintage, designed for use with a D-cell battery. Obviously, 14 volts of AC from your transformer will destroy it.
Stepping down the transformer voltage to 1.5 and converting it to DC may be difficult and expensive.
If you want to do away with the need to change batteries, you can look for a regulated power supply designed to operate portable radios and similar products. The device, a palm-sized transformer that plugs into the wall, has a cord coming from the transformer that feeds low-voltage DC to a radio, cordless phone base, or other electronic product.
Cut the barrel socket off the low-voltage cord and you can connect the wires to your freight station. However, you’ll need to find a power supply that outputs 1.5 volts DC. Some manufacturers produce power supplies that produce a range of voltages, one of which may be 1.5 volts. Check with your local Radio Shack.