More... Here are instructions I found on an Austrailian web site dedicated to restoring old tractors:

Ruston Hornsby Waterslide Transfers older types

The transfers are printed on duplex paper, i.e., one sheet as a guide to place the transfer in position, and the other as a support to the transfer. These two sheets must be partly separated before transferring. They can be divided by rubbing a corner of the transfer.

Before complete separation is made apply a very thin and even coat of adhesive varnish to the face of the transfer. Keep as closely as possible to the lines of the design so as not to overlap. Allow this varnish to set until it becomes very tacky and then place the transfer in the required position on the article.

The backing paper can now be removed completely.

Press the transfer down evenly and firmly, and drive out all air bubbles, by rubbing with a soft cloth rolled into a ball, commencing from the centre and working towards the edges. It is absolutely essential that the transfer should be in direct contact with the surface in every part. Leave for at least 24 hours to allow the adhesive varnish to dry completely.

Now apply water freely by means of a wet sponge, and when the paper support is well soaked, lift it up by one corner and peel or slide off.

After doing this, sponge with clean water in order to remove the composition remaining on the surface of the transfer. This is an extremely important detail, as unless it is properly done the transfer will crack.

To remove traces of superfluous adhesive varnish around the transfer, use a wet sponge to which has been added a little paraffin (kerosene?). Then quickly wipe it off with a damp washleather, away from the centre.

When the transfer is perfectly dry on the article, it can be varnished to add to its lustre. It must NOT be varnished directly after it is transferred.

I talked with a very nice guy today at Art Decal corp. He knew exactly what we have been talking about (and had some Lionel stories as well) he also described the process in detail (water, not paint thinner as Dennis found).
They do indeed still make water transfer decals. But the kind you soak in water, and then slide on.
http://www.artdecalcorp.com/watertransfer.htm
Also the solvent used to soften them to press into cracks.
He said he had not made a “reverse” type decal like we have been discussing here in years because nobody had requested one. They are pretty costly, in small quantities may be $250 per page. The cost dropping below around $60/page at 10 ($120 to letter both sides of 5 cars each) He no source for the special paper but is going to see if he can find a foreign source required to do a reverse transfer decal just like those on our old cars.
I may test a sample slide off decal to see how it goes.
I find cyber space amazing!
If I were trying to track something like this pre Internet my phone bill would have looked like the national debt.
Many, Many, Thanks to all here that helped
Buzz

Why? The things that are going to be problems will not be immediately apparent.

The adhesive that holds a water-slide decal to the surface it's applied to is starch paste... not the kind of adhesive I'd expect to stand the test of time.

There is no guarantee that the varnish used for the decal film is UV resistant, inks either, because they aren't made for outdoor use.

The purpose of the reverse process, as the gentleman called it, is to use a waterproof varnish as the adhesive. the decal film is also exterior grade varnish, and the whole job is covered by more varnish, so it all becomes a part of the exterior paint. This isn't going to happen if there is a layer of paste under the decal.

Please report back and tell us what the gentleman comes up with; also what you decide to do.