I had an idea to build a diorama like this a while ago, but I never actually followed through...
I had some highly-detailed scale locos, but not enough room for a layout with wide-radius curves. I also used to do a lot of railfanning, that included pacing mainline freight trains by driving alongside them on parallel roads in my car. It was always a thrill to see those Conrail freights rolling through towns, past houses, farms, and fields. Sometimes with the big blue locos just 25 feet away, for several seconds at a time!
So I wanted to film the view from the car window driving along an empty mainline. (Note: this could work equally well from a passenger train window!) Then, project the recorded video image onto the back of a "shadow box"-type diorama, behind an O-gauge steam locomotive chugging away on rollers. The finishing touch: a couple of looped "conveyor belts" could be added in the foreground with telegraph poles, station shanty, cars, trees, etc., permanently affixed to them. (Think of the mountain road scene at the Choo Choo Barn in Strasburg, PA with cars going across from one highway tunnel to another.) The foreground objects passing by on the moving belts would enhance the three-dimensional illusion.
The top, bottom, and sides of the diorama would be framed, such that the ends of the track and looped belts would not be visible to the viewer. If two or three foreground belts were run at differing speeds, the trees, telegraph poles, stations, cars, etc., would appear in pseudo-random combinations, as the train appeared to chug through the Pennsylvania countryside, smoking and whistling at crossings while recognizable landmarks passed by in the background.
I'm sharing this freely now, in hopes that someone actually builds it. This would make a great demonstration module to let folks run the train, blow the whistle, etc. Maybe the speed of the video and belts could be synch'd to the speed of the train! I hope someone does build it, because I would love to see how well the idea works in practice!