Try this:
Backup your custom content, routes, and assets.
Go to your Steam folder and delete all files (not folders!) except Steam.exe and the file that starts with "ssfn..."
Go to your Railworks folder and delete all files (not folders!)
REBOOT YOUR PC
Go to Steam folder and run Steam.exe (or try your desktop Steam icon); it should start a download of the missing files from Steam.
Finally, if necessary, Validate your Local Cache Files on Steam
I did exactly as you suggested, including doing a validation of local cache files for the 2012 upgrade (Railworks icon no longer available) and finally a long download began! Oh goody, goody! I'm getting the 2012 upgrade!
Since I had no icon on my desktop, I went into the Steam folder, down to the Railworks files, and indeed, it had replaced the files I previously deleted (as you instructed.) But hitting the application icon brought up the message, "You must be signed on to Steam." No matter what I do, signing off then back on still has me to "sign on."
What the heck is going on?????????