As I see it, you need to define the qualifying event(s). Then, we can determine how to detect that event(s). And then what to do about it.
For example, if a pusher drives cars into a swan-dive from a lifted bridge, the cars are certainly derailing! You'd want to immediately cut power to the engine...but it is electrically difficult to detect that cars are derailing since the power to the engine does not change much.
If you (your eyes) are the detector in all cases, then I'd think pressing the DCS red E-STOP button is the simplest way to remove power to blocks.
So to use your example, the qualifying event is a derailment in Block 1 which should instantly remove power from Block 2. What if the derailment is in Block 2? Should this remove power from Block 3? Or if operating CW instead of CCW should this remove power from Block 1?
The relay part (removing power) is relatively easy. And relays are inexpensive...maybe a couple bucks per relay. We can provide exact wiring instructions. It's defining exactly what you want to do that's the issue...in my opinion.
