I think you need to check your facts again - much of what you've stated is either blatantly wrong, or at the least, unsubstantiated by the evidence at hand. It's a disservice to all that have invested a lot of hard work in saving this national treasure over the last two seasons.
Seeing that many here aren't as familiar with the C&TS, I thought I'd clear up a few things, or at least provide a counter-point with some facts and photographic evidence of the amazingly good things that have been happening on the C&TS in the last couple years.
Ridership for 2006 was 39,586. As of the 8-Oct-2007 commission meeting, they were reporting ridership was up 7% overall (as you state), which would mean an expected ridership of ~42,300 for the 2007 season, or about 31% greater than your number. To substantiate these numbers, see the following:
Final 2006 ridership numbers from Durango Herald story
October 8, 2007 Commission Meeting notes
The "new" ties are hardly rotten. They were pulled out from under the UP (ex-DRGW) mainline in western Colorado when UP did a concrete tie replacement project. They're still extremely serviceable, and have a lot of life left in them - particularly considering that they're now holding up narrow gauge trains with an axle loading of around 35,000 lbs, rather than 120 car coal drags with 72,000 lbs axle loadings. They have a newly acquired little narrow gauge tamper that lifts and helps align the refurbished track. When you combine that with the fact they've dumped nearly 25,000 tons of ballast, they're hardly putting these ties in the mud.
Did you see the ties (many of classic D&RGW vintage) that were being pulled out from under the C&TS for replacement? Many of them didn't make it out in one piece, or were already broken and hollow on the inside. Tie replacement was desperately needed, and these folks did it.
The only picture I have of some of the replacement ties, these sitting in Antonito last winter - it's a crop of a distant shot, but should be adequate so show that they're in decent shape:
And the tamper, used to lift and align the track in the new ballast - if this shiny, newly refurbished machine isn't an investment in long term track quality, I don't know what is.
Clearly trackwork isn't free, and so far in the last two years, they've put in 21,000 ties, dumped 25,000 tons of ballast (which was all crushed granite that was trucked in, as there are no on-line quarries of suitable quality), and surfaced 2/3s of the 64 mile route. $3 million to do all that seems like a bargain to me - if they wasted that $3 mil, then where did the money for trackwork come from?
As evidence of the fine work these folks have done on the C&TS track, I offer two views of the track near Tanglefoot, one from 2006, and one from this year. I also offer up the fact that running times have improved this year. On time performance is also better, at least from the several times I've been there to witness it. No more hour or two hour late trains. From personal observation as a passenger, I can attest that the ride is significantly smoother as well.
Tanglefoot Curve in 2006:
Tanglefoot Curve after trackwork in 2007:
As far as the money issues, letter writing campaigns and such are nothing unusual. The C&TS has never been self-sufficient (hence the reason the D&RGW tried to abandon it) - it's an operating museum and engine of economic development owned jointly by the two states. Certainly self-sufficiency would not be expected in a year where they're trying to finish restoring a fourth steam locomotive, rebuild their only diesel, and catch up on some thirty years of minimal and deferred maintenance on the track, in addition to the usual winter expenses of developing and executing a marketing campaign for the upcoming season. Like most historical preservation and economic development projects, politicians are only interested if their constituents make their interest known. Hence the letter-writing campaign - to let our government know that this is a priority for a vocal and engaged part of their constituency.