Explain a caboose hop? I would imagine that being with engine #21 it was a snow plow run with the single car passenger train. the reference to Dragon might have been where the Shays stopped, letting the passenger train on down to Watson ( as there was seldom any real snow at that altitude) and then returning with the passenger train over the pass ( throught he white and drifting snow.........).
The Morro castle run with the gondola cars was usually from the ash pits at Atchee. The ever sinking and slacking hill side at Morro Castle made it the perfect site for cinders.