Re: It's what happens when...

The highway department rebuild the road without sufficient drainage, letting it seep into the earth of the hillside and underminding the railroad subgrade below the highway. The relocation of the track was to find a firmer base after the damage was done by the seepage. They should pay for a rebuilt C&TS right of way.
Also note this is exactly where Pepper Grass can be found which is the expensive plant used to make fine elm/oak shaped trees on HO and Sn3 layouts. It is like a weed along the road and is cut back by the highway department and regrows to a better shape where cut down.