A re-read of the original question shows Don B was asking about the 1950s-1970s time frame. The closest I can think of is the Dunes Pacific Railway near Florence, which would have been built around 1970-1971 and lasted for maybe a decade or so. Equipment was a Vulcan diesel mechanical switcher and a couple steel frame four wheel cars, all from the McCloud River Lumber Company sawmill, the locomotive had a fake steam locomotive boiler and cab built over the guts and the cars were retrofitted to passenger carrying flats. Not much out there on the web about it, there is one picture at this link:
Could this be what Don B was asking about?