If I follow your description correctly, then I believe you are spot on in your solution: Install the toggle somewhere on a separate wire run from the main terminal block to the siding and insulate the siding using insulated rail joiners.
EDIT:
Did a little bit of post Post searching and found this thread. It shows TWO cab control, but the basics for switching a ‘Block’ or your passing siding are there.
I like pictures waaaay more than text 