Yes, that will work; however, what you can not do is have a train crossing the insulated gaps on either of the tracks at that location while another train is crossing the gaps on the left leg of the wye. Depending on how you plan on operating and whether or not the reversing section would still be long enough, you might be better off moving the gaps on the left hand side down to just below the turnout for that siding. It just looks to me like you would have less likely hood of trying to cross both sets of gaps at the same time with that arrangement.
You also cannot cross the gaps on the left leg of the wye at the same time that you cross the either set of gaps on the right leg of the wye. For that reason, I would move all three of those sets of gaps as close to the two turnouts on the bottom of the wye as possible.
Is it possible to move the gaps on the left side of your layout diagram, so that the turnout is gapped before the passing siding rather than your proposed arrangement where both tracks are gapped at the other end of the turnout? In other words, gap the two rails at the bottom of the turnout rather than the four rails at the top or upper portion of the turnout. That way the entire passing siding is outside of the reversing section. That just seems like a cleaner arrangement.
My own hand in your success is next to nil, but I am still happy to read posts from frustrated users who come back and report that they have their problem solved. [:)] It is good for the forum, and great feedback for those who stick with the sometimes increasingly despondent or downright angry poster who has the problem…we have some very patient and talented people here.
Thanks Crandell, you helped quite a bit also. I have to admit, I was a little angry and frustrated and ready to give up this idea, and really the solution was not that hard to implement. I realize that the trackwork I ripped out was probably for nothing, but heh I don’t care now that it’s all good.