Slight re-think and a bit of experimentation.
the IR sensors do work, but not perfectly, they also require a bit of mucking about in code, and an Arduino can only look after three which is not ideal.
Dingleberry is already using DCC current sensing for block detection, currently (sorry) via Analogue to Digital converters, current transformers etc. Bit of a mess, works though, mostly - can see locomotives but a vehicle with a 10k resistor on the axle and it struggles.
tried again with a voltage comparator, measurements of the voltage the CT are producing showed a locomotive at rest results in about 35mV, a coach about 2.5mV (hence why the ADC struggled) - in theory it could pick up 1.2mV, but noise confused it so it could see the coach, occasionally. A comparator can be given a 1.2mV reference voltage reasonably easily and see the coach reliably.
Well as reliably as a wheel to rail interface will ever be, its mostly about detecting things that are moving so smoothing the output works quite nicely with a capacitor, adds a very slight delay to seeing a block occupied or empty but otherwise is more reliable, a bit of code can swap for the capacitor to take "n" samples and if any of them are logic high, flag as occupied - as unoccupied is always zero here.
currently pondering swapping the IR sensors for more basic current transformers, just means adding more isolating sections and rail joiners - only have one loop and two sidings to adapt, does mean wires soldered to the sides of the rails as its mostly set track and some of the sections will be a single track section (so I can have a run of track then a smaller "end" block for it to trigger a train stop action), but I can live with that given how small Dingleberry really is.
this has the further advantage the sensors are below the board, and as long as the insulating joints are there and the dropper wires in place the actual sensors can be added later.
for some of the existing track I may just dremel a slit into the rails and just add a few more feeds, easier solution really.