Put just the "dummy" on the tracks. Check for a short. If no short then here is the problem. Both locos have metal Kadee couplers I bet, and are facing in opposite directions from each other. The frames of each loco are still picking up power via the trucks. When they are facing the opposite way from each other, the frames are picking up power from opposite sides of the track, and now you have a short!
Solution is simple. #1:
Costs money!
Get Kadee couplers for the locos in Kadee's #20 series. These are the insulated series I believe, (you can check on Kadees web site), and will not cause this short. #2:
Costs nuttin!
Switch the trucks on the dummy engine from front to back. This will reverse the pick-up on the dummy engine to the same polarity as the powered one. Good way to confirm take the bodies off of powered and dummy engines, and place the mechanisms on the tracks as you are going to run them. Make sure the electrical pick-ups on all 4 trucks,
(that L-shaped piece of steel coming up from the inside of all trucks), are all of the same side, when these locos are coupled, again as they will be when running, back-to-back or elephant style, (front to back). Even though you've removed the gearing on the truck and the motor, from your description, you haven't removed the electrical pick-up on the trucks.