By all means take the inner loop out of the equation. Even though your layout size seems small at 10X12. You have a lot going on for one channel. The relay was a good move. Certain Toggles have been known not to pass the signal well.
Years ago. I had a issue that took a couple of nights to figure out. At some point I blew a fuse knocking out one of my channels. What I hadn’t realized that with the weather changing. My lift out bridge which separated 2 blocks or TIU channels now had the center rails touching as the wood crept a bit. I run a large power supply and both were on the same input. TMCC engines never new the difference. The signal meant nothing to them. My few DCS engines ran erratic in the yard area doing switching moves. Track signal went from what was always a 10 to a 2. Finally figured out the problem. One channel was now feeding both blocks with way to much trackage to put out a good signal.
