As far as I know, there is nothing about "Kathmandu" in a Little Golden Book. However, I do have another LGB called "The Train to Timbuctoo", by Margaret Wise Brown, first published in 195l and renewed in 1979. There are two trains in the story, one big and one little, so there is mention of "the little red caboose" in the course of the story. Could this be the book you remember?