That change of paint might have been the reason for the scrapping. The story was that Dr. Cox had bought the engine (along with all the other stock he had bought) and all his purchases were marked with "USA" on them, pending the shipping which never came.
Painting Erne in green might have tidied her up cosmetically, but it also removed any markings of Dr. Cox's ownership so there was nothing to warn off the scrapmen when they came by in 1967 or 1969 (depending on which source you read).
Hammond Lane Metal Company of Dublin dealt with much of the scrapping of the CDR lines, but it's not known if they came back for Erne or whether a different contractor took the job.