Just found some new info. Here are the links to the article sections.
This is a railroad that was graded, and has many of it's structures completed, and the tracks laid part way, but was never completed.
The surprising part is that it says the grade runs above US 41/64/72 most of the way through the Tenn River Gorge. There are tons of concrete culverts and bridge piers along the route. There is a tunnel along US 41/64/72 at Raccoon Mtn.
Part 1: http://www.chattanoogan.com/2014/12/10/285293/Chattanooga-Railroad-Series-The.aspx (http://www.chattanoogan.com/2014/12/10/285293/Chattanooga-Railroad-Series-The.aspx)
Part 2: http://www.chattanoogan.com/2014/12/11/286146/Chattanooga-Railroad-Series-The.aspx (http://www.chattanoogan.com/2014/12/11/286146/Chattanooga-Railroad-Series-The.aspx)
Part 3:http://www.chattanoogan.com/2014/12/16/289853/Chattanooga-Railroad-Series-The.aspx (http://www.chattanoogan.com/2014/12/16/289853/Chattanooga-Railroad-Series-The.aspx)
Part 4:http://www.chattanoogan.com/2014/12/18/289899/Chattanooga-Railroad-Series-The.aspx (http://www.chattanoogan.com/2014/12/18/289899/Chattanooga-Railroad-Series-The.aspx)
Part 5: http://www.chattanoogan.com/2014/12/22/286855/Chattanooga-Railroad-Series-The.aspx (http://www.chattanoogan.com/2014/12/22/286855/Chattanooga-Railroad-Series-The.aspx)
Part 6: http://www.chattanoogan.com/2014/12/23/290710/Chattanooga-Railroad-Series-The.aspx (http://www.chattanoogan.com/2014/12/23/290710/Chattanooga-Railroad-Series-The.aspx)
Part 7: http://www.chattanoogan.com/2014/12/24/290701/Chattanooga-Railroad-Series-The.aspx (http://www.chattanoogan.com/2014/12/24/290701/Chattanooga-Railroad-Series-The.aspx)
And traffic on the NS Memphis District is still limited (somewhat) where they go over the CSX tracks to get from Stevenson, AL to Chattanooga, TN because CSX has priority on their tracks over NS.