Toward the end of the Pacific Extension's life there was a proposal to rescue it (and the rest of the Milwaukee) called the Milwaukee II proposal. Does anyone know some details and where I might get some information about it?
Trainweb article by Tom Jones: Milwaukee Road in the 70's: What really happened?
Motorbooks International book by Tom Murray: Save Our Railroad Employment
S.O.R.E.'s motion to intervene in CMStP&P bankruptcy proceedings, 1979
Hopefully this is a good start for you - the Trainweb article is the most sensationalist, but also has the best narrative on why the lines should have been saved.
EDIT: The Milwaukee Road Archives has an entire section on Milwaukee Road bankruptcy, as well as the SORE, New Milwaukee, and Montana Pacific proposals to continue operation of the westernmost Milwaukee lines, ending with the final court case to decide why the C&NW, despite bidding a higher amount for the MILW, was not preferable to the Soo Line's bid.