I have the NCE DCC system too. NCE does make stationary decoders for both twin coil switch machines and the tortoise type switch machines. I'm not familiar with fastrak switches in S scale so I can't say with any certainty if the NCE decoders will work for you but if the Fastrak turnout is a simple twin coil machine built into it then the decoder should in theory work. Hopefully someone will chime in who has experience with the Fastrak turnouts in S Gauge.
I'm not sure what you mean by outside rails being tied together. That would cause a direct short in S gauge. Perhaps you mean O Gauge 3 rail. Fastrak switches have a non derailing feature in O gauge. Just a guess but there is probably something not making a good connection which is causing your derailments.
Sorry, my mistake. I didn't realize both posts above were different people. Obviously, the second post is about O gauge Fastrak.