Ouch! What a shame!
I feel your pain, a little. All my childhood trains recently came back to me on Mom's latest trip... For years I've been asking after them, and only now has she cleared enough junk out of the basement to get to them.
The results weren't pretty. The trains have obviously been subjected to moisture and all metal parts are pretty much rusted to each other. From the smell, I'm guessing at least some of this moisture is courtesy of the family cats (grrrrr.).
Mind you, I think it's less of a loss than yours. We're talking late 70's era Bachmann, Athearn and Tyco stuff. Not precisely high-end, and mostly not appropriate for my current layout. It just cheeses me off to see it ruined - if nothing else, it would have been good fodder for my son to get his feet wet with little worry about damage or breakage...
I'm planning to take a couple steam locos, 'weather' them even more than they are already, and put them at the bottom of a gorge next to a trestle - too far down to even drag out for salvage value, and a warning to engineers who go to fast on curvy trestles... Other than that, a total loss.