From the modelling point of view the appearance of the ballast and the level (vertical position) of the track do not need to vary in the same way as the real thing.
Okay... that divides into two parts.
1.
Model RR ballast is purely cosmetic and, most of the time, we only look at the top layer. Therefore however you make up your normal ballasting to whatever height is good. This applies whatever the depth (or lack of depth) of the ballast is compared to the ties. What is more likely to change is what you choose to use as the ballast material and how you "weather" it.
If you can find my earlier posts on ballast in this and the old forum (try under "David Foster" in the old forum... and if you find it PLEASE let me know how) you will find tons of stuff on ballast colour, shape and more.
From what you describe you are looking to give the impression of:-
Unless you want to change the levels of your track these can be represented with the rail head maintaining a constant height and level... you just move the "cosmetics" up or down in relation to the rail head... which is a matter of how thickly you layer on the foundation and top coats.
If you want to change the railhead level you are into a different thing that I will come to later.
Okay... so dealing with the surface appearance...
Working in the other direction...
I've just posted so as not to lose this and re-read your question.
I think that this is the point at which to diverge...
You talk about the ballast being at ground level instead of raised. This is a matter of perception. If you think about it the ballast in a cut is "below ground level". Ballast is meant to be a distinct formation that sits on the local terrain providing (mostly) a combination of track holding and drainage. Therefore the true profile of a cut goes below the base of the ballast. Then the track formation including the ballast sits on top of it. This also applies in level terrain. Ballast usually appears as built up at least 6" to 1' and sometimes more. Where it doesn't it is effectively sitting in a shallow cut. If the local drainage is good this isn't a problem... if the drainage is bad it probably is a problem... which may be solved by added drains that you will not see unless you know what you are looking for... or fall into one. (I do not recomend the latter practice... it hurts and you get wet/mucky . Guess how I know?). When formation on top of a fill is new (rather than renewed or maintained) you will usually see a clear break between the formation build up and the ballast profile. It sometimes shows on a full renewal. As a comparison it is like a layer of icing that doesn't quite fit on the top of a cake.
Getting back to appearances.
It doesn't matter where the track is sitting any of the (arbitrary) three conditions can apply.
Posted again and rechecked the question and pic...
Okay... basically filling up to level with the ties is just a matter of doing just that. With whatever ballast and/or ballast and dirt mix you are using for the area.
Looking at that pic there is actually quite a lot of pretty new looking large ballast around with a number of patches of brown "dust". this might more easily be modelled by doing the whole thing with good large/"new(ish)" ballast and topping up the brown areas with a brown dust/dirt later.
Okay. I'm going to move on.
2.
Vertical height.
If you are new to MRR you will find it less hassle for a layout or two to keep your railhead height constant and visually move the ground up or down around it.
If you want the extra hassle you can start to move the rail head around.
You need to do this at the planning stage... same as you plan where your grades are... because like a grade in the baseboard structure whatever you are going to use to raise (or omit to lower) your railhead height is going to happen before you lay your track.
(So... if your track is already laid you are going to be ripping up a lot of track or making the differences purely visual as I have suggested).
You need to decide:-
I would recomend no more than 3 levels and probably only 2. Any more levels will look too complex in most situations and will give you way too much work and trouble. If there is good cause for more levels work out how to make some of them appear to be there cosmetically.
Okay... The basic way that most people use to get different levels is to use different numbers of layers of sub roadbed. If this is cork sheet this is a doddle. If you want 3 levels the top level gets 3 layers under it and the bottom one just one. You can even sneak in an extra low level by having none. You have to work out what is where and get the cork laid first. If you want to make life difficult you can get different thicknesses of cork. I wouldn't bother. (If you make differences too small you simply will not see them and all your effort will on
Look for threads on using tile grout and sand as ballast. I just started one yesterday and I think there's an old one on trainboard.com
I'm using WS foam glued to a pink foam base. For yard tracks, it looks like applying sanded grout with a foam brush buries the tracks nicely. Since I'm modeling in N-scale, my problems are how to easily get it off the ties for high profile mainlines and how to keep it out of the rail webs so I don't have to dig it out with a dental pick while it's still wet.
I think it would be easier for HO and grout is a lot cheaper than any commercial ballast. Follow the safety instructions because grout does contain Portland cement.
I am building a switching layout where the track goes from main line (interchange track) to pickup track to switches and spurs. What I am doing is using stacked cork (1/16" thick gasket cork you can get in auto parts stores). Since this is just a secondary main, regular commercial cork roadbed was too high, so I stacked two levels of cork; the top layer being slightly more narrow than the "base" layer. The pickup track is lower, with only one layer of this cork. Then the switches and spurs are right on the plywood; I know most modelers don't lay track right on the plywood but this will not be a high speed, high traffic area and noise will not be a factor here.
I intend to transition from ballast on the corked areas then to cinders in the tracked areas that are attached to the plywood. I will keep applying cinders on the track and around the general area until I get the desired depth to either to partially cover or completely cover the ties in this area.
The transition from "high iron" to sidings, spurs and switches is done in a "stair-step" fashion; the "step" should be at least 1" if you're modeling in HO. I suggest you go out to some tracks in your area where there is a main that has some switches off of it and look at these transitions in track bed as well as from ballast to cinders or dirt.