Northlake was the end of the MILW branch... and as far as I know, always was. The track ran past the depot into what was, at one time, a lumber yard, later the location of the KMRy shop. The C&NW was, IIRC, less than 1000 feet north, but about twenty feet higher in elevation.

The fact that there were coincidentally two railroads in Northlake had some some grave consequences for another preservation society... a story that mostly pre-dates the KMRy. Here is what I recall from very fuzzy memory:

In the late sixties there was a certain amount of interest in adding an electric interurban/streetcar operation to the Mid-Continent museum at North Freedom. The name "Wells electric railway committee" or some such comes bubbling up from the past. This was not to be, the Mid-Continent membership voted to limit their mission to Midwestern branchline/shortline railroading, and the electric railway people formed The Wisconsin Electric Railway Historical Society (the article was part of the name, making the corporate initials TWERHS, same as the Milwaukee Electric was TMER&LCo.) and moved their equipment to a storage site along the C&NW in Northlake. I visited once when I was still in high school. I'm not sure if there was some desire to acquire the MILW branch in town... at this late date it seems likely it was given some consideration, I do know that when they received a donation of reefers during the 'great URTX reefer giveaway' some of the reefers ended up in storage on the MILW in Northlake.

TWERHS eventually settled on a museum site on the former Milwaukee Electric East Troy line, but before the equipment was moved, the MILW embargoed their line into Northlake and refused to run on it again to take the stored reefers out. The solution was to hire one of the large end loaders from the local gravel pit to haul the cars out to the end of MILW active track. This was maybe not the best of plans... the cars ended up greeting loose, and rolled on their own until the came to rest in a sag, unfortunately blocking a county highway crossing. It was dusk, and because the line was technically abandoned, the MILW had either removed or deactivated the crossing protection. A local man came speeding over the hill and broadsided the car sitting on the crossing, killing himself.

TWERHS did complete their move to East Troy, but the resulting wrongful death lawsuit dogged the organization for years, before they finally lost on appeal. I'm not privy to the terms of the settlement, but I can't help but think that the financial drain was one of the contributing factors to the ultimate failure of the museum at East Troy.

The Wisconsin Electric Railway Historical Society still exists, sans museum, and there is more background on this page:

http://www.trainweb.org/twerhs/ourhistory.html

Disclaimer: Since I was never a member of TWERHS, only viewing these events from outside, anyone with corrections is more than welcome to voice them.

To expand on what Dennis had to say..... The tracks crossed HWY 83 and continued up to the ice house on the north side of North Lake. I believe this portion was removed in the early thirties.

The KMRY did own 2 ex-Milwaukee Road Alco RSC-2 diesels. They were sold and left North Lake via the Milwaukee line before it was abandoned east of Merton.

The highway crossings were from west to east HWY E, VV and Dorn road. When the ride was extended they crosses VV again in Merton, and Lake Five road.

Kurt, drop me a PM. I think I can save you some time and get you a direct source. Cheers! Jim