If you get this one you're the BEST

probably need some more info on how you are running your trains, either conventional or command. (sounds like you are running conventional) If the problem only exists at this one particular switch, take the locomotives off the track power up your Z4000 to a particular voltage, and check the rails along the switch area with a volt meter to see if you have any drop outs. sometimes those atlas rail joiners can lose good connection and cause the issues you speak of. if you find a spot that is either low voltage or no voltage, try sliding the joiner around to see if voltage comes back. if it does, then you know where the problem is.....a tiny smidge of dielectric grease I find helps keep the voltage flowing on Atlas track. check  all three rails in the vicinity of the issue. it does not necessarily have to be a center rail issue, it could be outer rail or the "common rail" as its called. Dirt, carbon, and grease can commonly build up especially on switches. sometimes I find I have to get a little more aggressive and break out the scotchbrite pad to really get the switches cleaned off, then follw up with alcohol. 

I would start at the switch and check it out electrically with a meter. I would examine it physically to observe if anything fell into it. Check that area for any continuity problems or changes in the track.

usually the opposite occurs, steamers will be the problem.

Move an offending diesel slowly through the area and observe if the side plates bump anything.

I would definitely remove the K-line caboose. One of the wires in the truck to the roller or common could be disconnected or melted. You had no problems until this trouble maker arrived.

Ok, do you have the common on both outside rails? You may have isolated the common rail in that area if you do not. The steamer is long enough to maintain ground/common contact in that area, while the diesels do not.

A Connect a temporary jumper with alligator clips to both outside rails away from that switch area and run a diesel through the troublesome area.

I agree with Carl, you have to check your wiring.  I would also disconnect the crossing gate completly from the track.  Just as a guess, the fact that the crossing gate starts when a locomotive enters the block suggests that it is getting power from the track and not your external source.  I would further guess that the hot and common wires are swapped on the gate or, if it is powered by another transformer, the transformers are not in phase.

Let us know how you make out.

Sure sounds like a track connectivity issue. The non isolated rail may have a bad joint that the diesels aren’t heavy enough to overcome or span. A voltmeter won’t tell you much unless you can use it with some kind of load, like an automotive bulb or similar. Is the switch near or in the isolated section?  The fact that the noise happens with the gates off eliminates them. Is the Z4000 your only power source?

Sounds like the outside rails are not electrically connected.  IMO, you can never have too many. power feeds.  Depending on rail joiners to power each successive rail can bite you.  Always feed all rails of each track at all connecting ends of every switch or crossing.

I appreciate everyone's suggestions. I am going into "the trenches" now to check a few things as suggested. 

Harmonyards I use command control. John H. the Z4000 is my only power source and yes, the switch is in an isolated section. Moonman and Harmonyards I was thinking the same thing you said about the diesels not being heavy enough or long enough to span the switch.

Thanks again and stay tuned...

I have connected the meter and power is great. I added feeder wire as well. The train engine runs fine when there is rolling stock behind, but solo it is still having the same problem.

It sounds to me like the switch is not getting ground, I wonder if perhaps you have a break in the ground side on the track to act as a detector for the crossing gate. A detector track basically uses the ground rails as the detector, they electrically isolated them from the rest of the layout (gap, insulated pin) on one side (the one going to the device), wires are attached to the rails, one from the ground on the transformer to one of the rails, the other rail is connected to the ground on the operating device. the metal wheelsets short the two ground rails, allows the ground from the transformer to get to the device, and it actuates. 

If the switch is part of this isolated section it may be causing it problems with being grounded. If you are using an isolated section, I would put a jumper between the outer rail of the offending switch to the rail in the isolated section that is grounded to the transformer, and see if that works.  

The other thing I am wondering is could the units that fail have the wheels electrically isolated and pick up ground from only one side via a wiper on the axle. If the switch is grounded only on one side (if the other side is isolated because it is on the same side as the accessory ground side), it could be there isn't ground pickup on that side (that said, I don't know of any three rail engines that don't pick up ground on both sides). On a single sided ground if it is on the device side, it would only see ground when the crossing gate was tripped. 

One suggestion if the switch is part of the isolated segment for the crossing gate, move it out of the crossing gate detection zone, so it has full ground on both sides, and see what happens. I am pretty sure the reason it works with rolling stock is when they go into the detector section they bridge the isolated segment with their wheels and bring ground to the switch, and I think moving the switch out of that zone would fix it. If the switch is outside the detection zone, then wire ground wires to the switch outer rails. It could also have nothing to do with the detection circuit, it could be that the switch somehow has become isolated on the ground side, in which case jumpers to another section of track on the ground rails should fix the problem.