Hi, Shelton!
I don't see a decoder on the picture. Looks like the reverse unit of an analogue loco.

Does the serial number begin with an E?
https://www.marklin-user...ive-s-serial-number.aspx

It's an analogue 3360, not a digital 3660.
You cannot run analogue locos with an MS2.

The item is not as described if it was listed as 3660.

The serial number should be under the powered truck. Which number is on the box?

That's the normal behaviour of analogue AC locos on a digital layout.

I would use a decoder with at least AUX1 and AUX2. I'd take AUX1 and AUX2 for the red lights and LF/LR (front lights, rear lights) for the white bulbs. A li'l bit of decoder function mapping will give you all possible light combinations.

You could use LF/LR only for both white and red lights - but then red and white will be on together or off together.

I've just done this very conversion on a 3355 (same loco, but S-Bahn livery).

I fitted an ESU conversion kit, which has a Lokpilot V4 decoder and a permanent magnet to replace the Marklin field coil. The part number is 64632, assuming that yours has the Drum Commutator Motor (I think all Marklin Br.111s do?) You'll also need some heat-shrink sleeving.

I left the factory wiring in place on the headlights but removed everything else. Desolder the headlight wiring from the existing circuit board, also disconnect everything from the motor.

Wire the lights up first, look on the loco body to check which is number 1 end (it has "1" and "2" near the cab doors), on my three 111s #1 end has the pickup slider. Regard this as the front when you're wiring the lights.

I wired my lights so that the headlights are directional on F0, but the tail lights are switched separately on F1 and F2. That way I can turn them on as needed rather than having a train behind and tail lights showing (or headlights shining on the coach next to the engine in push-pull service), which isn't realistic. If I have a push-pull train coupled to #2 end of the loco and want #1 end tail lights on then I just switch on F1, when reversing I switch off F1 and switch on F0. I believe that it would be possible to have directional tail lights controlled by one function button, but trying to program that with my 6021 is just asking for trouble! I'll stick with the current mapping for now, it works.

Use the heat shrink to insulate the joins between the decoder wires and the factory headlight wiring. I'm not sure if you've done this before, but if not then you need a common return from all four bulbs which connects to the blue wire from the decoder. Mine had a common return from each end's bulbs, so I joined them together and to the blue wire. The other pins on the bulb holders connect to the headlight outputs and the function outputs.

If when you finish you find that the headlights don't match the direction of travel then switch the motor wires over. That way when your controller says that the loco is going forwards #1 end will be leading, which makes it much easier to keep track of what's happening.

I'm not sure how easy it is to program CVs with the MS2, you will have to program a handful of settings to get the best performance. The values are in the decoder manual, you can download an English-language version from the ESU site if you need it.

The cabs should be marked with I and II respectively.

And with most Märklin models cab 1 is ahead in the default direction (it's cab 2 for E 17, E 18, E 19, V 200, and most 103.

With two-truck locos, use the powered truck as the rear end to maximize tractive effort. They run either way in the prototype world if they have two cabs.

I think with Ae 3/6 the two unpowered axles should be at the front.