When the railroad was removed in the early 1950s, the majority of the extruded aluminum, not steel, rails was given to the Los Angeles Live Steamers, a club that Walt was a member and still exists today at Griffith Park. It is the current home of Walt's Barn, the central feature, workshop and hangout for the Carolwood Pacific Railroad. http://www.carolwood.org/barn.html
Also, the tunnel still exists, although not under the current driveway. It's more on the side of the house. The owners kept it in honor of the history of the property, but also because it could make a great storage place or wine cellar. I had the opportunity to walk through it before they sold the property. You can see the attached photo and more in this gallery of the new house. FYI, this house has NOTHING to do with the original. http://carolwood.theagencyre.com/property-highlights/
In the attached photo, this is the North entrance of the tunnel. The wall, arch and wooden doors are all original and the only things on the property, apart from the front gates on the driveway that are from the original home. The steps are obviously not original. Anyway, cool place and neat history.

With some young friends on the Lily Belle, which he helped build by machining many of the small parts. It's now in the Disney Family Museum in the Presidio, San Francisco.

Here's a neat short film about Walt's trains:
https://www.youtube.com/watch?v=G1Rf7Ygy6TA

When they tore out the railroad a whole lot of the handmade steel rails went missing. The one thing they didn't get rid of was the tunnel that went under the flowerbeds. They just buried the entrance and exits. Supposedly the tunnel still exists under the current driveway. I bet it's filled with the missing railroad rails. Article here.

It's not uncommon as you might think. There are clubs that promote this hobby. Being from Long Island, there was an active club that had run days open to the public. They have multiple gauge tracks, one nearly a mile long. The clubs facility is in a county park so they cannot charge the public but do accept donations.

http://longislandlivesteamers.org/

Search 'live steam clubs' and you should find several more.

Ah, this takes me back to my youth, when I ran the 1 in 8 scale steam locos my father used to build in the spare room.

Lots of information here about Walt Disney's famous model railroad.