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Hi Don,
If I've understood correctly your description of the space you have available I can't visualise any OO layouts that would allow you to actually run trains for any distance. Personally I would use most of the main 2.85m x 0.44m space to model a medium size MPD. On the left leg you could model a section of mainline between two tunnels onto which the MPD would be connected. This mainline would lead via a tunnel to an imaginary main station/goods yard and would be where your locos came from or went to after servicing. I'm sure that the space you have available would enable you to model a reasonable size shed with turntable and coaling facilities.
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