Which component cannot handle the higher wattage?
Assuming your supply delivers \$24\$VDC it should work.

$$I=\frac{24-2-2 \times 3}{120} = \frac{16}{120} = 133\text{mA}$$ and $$P_{\text{res}}= 16\text{V}\times 0.133\text{A} = 2.13\text{W}$$

But if you are using \$24\$VAC, then \$I=217\$mA and \$P_{\text{res}}=5.6\$W. This could be the problem.

Assuming \$24\$VDC you could consider using \$4\$ LED's in one string and a \$1\%\$ \$3\$W \$82\Omega\$ resistor in series. That would preserve a lot of energy otherwise wasted as heat (\$I=121\$mA, \$P_{\text{res}}=1.2\$W).