Typically, Metra under Pagano didn't offer much hope for new services until the State told them to do it. Your governor and WisDOT, must got to the State of Illinois to work out something to direct Metra to participate.
Metra is authorized under State legislation. While it's true that it is not permitted to operate in another state with the exception of Kenosha, that could be amended with a bi-state agreement for authority and cost sharing. Metra accepts the South Shore, so I'm sure a similar arrangement with Wisconsin wouldn't be too difficult for just two lawyers to work out.
As for passenger volumes, Wisconsin riders would build as Illinois riders detrain. I doubt that the numbers of through riders would be significant from north of Kenosha to Chicago, particularly with the faster Hiawatha service throughout the day between Chicago and Milwaukee and could provide more frequent peak service that I've posted before.
Just as the Milwaukee District North and Union Pacific North share a substantial ridership in overlapping catchment areas, so might expanded Amtrak service with new stops in Gurnee, Lake Forest (West), and Lake-Cook, the last replacing Glenview. This could be relatively cheap to implement and augmented at a later date by the lakefront KRM line.
A separate KRM line would offer an opportunity to use the freight track from the wye at the Kenosha station to a new West Kenosha station on the Hiawatha line. The west station location is problematic and needs study.
It sounds like KRM is pointing in the wrong direction to drum up support, they are proposing an operation similar to Shore Line East between New Haven and New London CT. They might have better luck if it proposed as a suburban operation oriented to Milwaukee.
Another thought, more than a few years ago there was a proposal to reinstate the Milwaukee-Watertown operation but on a slightly more frequent schedule. David P Morgan took up this proposal in "News and Editorial Comment" and suggested that this proposal was unrealistic and that while commuter rail sounds nice, it's not the solution for every situation and that an express bus schedule might have been more realistic in this case.
Let's hope it can proceed.
C&NW, CA&E, MILW, CGW and IC fan
Here you go:
http://www.jsonline.com/blogs/news/99767164.html
Current Wisconsin Rail Map:
http://www.dot.wisconsin.gov/localgov/docs/railmap.pdf
Given your state's current political climate, you'd have to organize a local/regional transportation authority, like Chicagoland's RTA, which is the taxing body over Metra.
Right now Milwaukee Union Station is underused. Milwaukee want's some form of commuter railroad and there are homes scattered along Lake michigan...right around the old CNW passenger line! it's be hard to get a second track to go all the way but the line could run on a weekday schedule similar to the North Central Service (http://metrarail.com/metra/en/home/maps_schedules/metra_system_map/ncs/schedule.full.html) people hate to drive in gridlock on 94 and over time, the company could expand onto the CP line west out to Waukesha and Oconomowok and north to Sheboygan, relieving the stress of going to work in stop and go.
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