Like some of the others said, it has got to be a bad wire/connection. The distance from the transformer would not be a problem, unless we are talking about sending DC current a few miles... If you were trying to send DC too far, it would just degrade (and derate) to a lower current available, but would still light the lights and make the engine hum, at worst. The voltmeter would be my first step in figuring out the problem. If there is no power at the rails, do a step by step check to find out where the power stops. If no power at the rails, check the next "broken" connection (the place where the wire connects to the rails or beyond the switch). If none there, go to the next point, and the next point, all the way back to the transformer. Somewhere in the line, you will find you have power before the connection but not after. This is the connection that needs to be replaced.
I have gone with the "block" idea and feed all areas from a "commoned" screw buss. This allows me to remove a section that is acting up and run the rest of the layout as normal until I get around to checking it. It also gives me the fewest connections between the transformer and each block, making it easier to trace down problems. I even have "sub blocks" inside blocks to allow for easy access to the wiring points. It makes it easier to expand and gives you a junction to tap off from when you add anything new.
Tom F