A Possible Explanation: Being the Devil's Advocate

Mark,
Believe me, I am in complete agreement with your position! That being said, I also understand the situation that Ed Nichols is in! I wouldn't be at all surprised to find out that he is privately cussing out everybody that caused this problem (one can hope that Bell and Behrens actually DID get their *sses chewed off!) With this in mind, let me offer a possible explanation for his response to your offer.
The CHS has a current operator's contract with Railstar and having another engine (no matter how badly needed) would be unworkable at best and probable grounds for breach of contract by Railstar if they so chose to pursue the matter. Don't forget, Ron Trottier wants to make this work as badly as you people did. The big difference is that he was willing to agree to conditions that you knew wouldn't work!
Your insisting that GTL Inc. retain sole operating satus of any leased locomotive is the only smart thing to do from a liability standpoint but having GTL Inc. run the main engine would mean that Railstar's engineers and firemen would be relegated to part time status or other duties and I really think that Ed Nichols probably weighed the consequenses between running the #12 into the ground and possibly losing the only operating steam engine they currently have or having the #40 and cars come back up to the Loop for the rest of the season and decided that the benefits just didn't outweigh the problems! I'm not sure that I wouldn't agree with him!
The real problem is that Railstar is still in the picture. They have done everything that was contractually required of them and the only way that this would work is if the CHS terminated it's contract with Railstar. If this were to happen it would have to be for a particular reason or there would be a big stink! (It is a Govt. run operation after all!)
Rather than "lumping" Ed Nichols in with Bell and Behrens, I would advise that you keep the channels of communication open (well, back-channel at least!) in order to give the CHS the "wiggle room" it may need in order to save the Loop for 2008! If nothing else, it will give Ed Nichols a way out of the corner that Bell and Behrens have painted the CHS into!