Reason to photograph outside

zedob said:
I used a slide projector to create the shadows on my diorama ...

Yeah, pretty much you're modeling the Sun. One seriously intense light source. But as you say, it's not good for regular lighting of a layout. Though I'm sure some people have come up with some clever ways of making "dioramas" within their layout which have independant light sources.
 
It is possible to get good results indoors too if you have a good lighting setup. These shots were taken at our club layout with just overhead flourescent lighting.
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