The funny thing is that by 1881, the Gorge War was over and the D&RG's dreams of a Denver-Mexico City mainline crushed by the ATSF getting Raton.
(That said, I never did figure out why the heck you'd want Raton. It's a pain in the rear pass that's easily avoided by going to the east, if your goal is just to reach the Mexican border...)
Palmer did have a narrow gauge project going in Mexico in 1881, though. Take a look at page 133 of "The Railroads of Mexico" (1921, conveniently available
scanned on Google Books.) - it mentions Palmer was working on the Mexican National Railroad, connecting Mexico City to Laredo and Manzanillo. (Very much the wrong way to connect with the D&RG, though...)