Blending between HiLite and Train

I wonder if anyone can help.

Here's the photograph I started with:

IMAGE LINK: http://www.flickr.com/​photos/atp/4172192246/

You can see the HiLite that I was using as a background, the train along the floor, and various other unwanted things.


So I did some processing:

• Cropped in a little (still maintaining the aspect ratio)
  
• Drew in bright white to make the interface between the HiLite and the train into a smooth line, also drew out to the edges to remoev the ligthing gear
  
• Extended the train outwards so as to remove the floor

Then the difficulaties started. I wanted to create a nice smooth transition between the HiLite and the train, so my first thought was to select the relevant area and jump that into a new layer. I then applied a large Gaussian blur. Of course, that then blurred in the transparent background, so the harsh transition still shone through.

I ended up makign two copies of that "jump" - the upper I made a gradient and, the lower I trimmed vertically but kept complete horizontally. So when I blurred the upper one it blurred into the original layer, but the middle layer means that the transparency of the upper layer didn't show the original through.

Here's the picture I ended up with:
IMAGE LINK: http://www.flickr.com/​photos/atp/4171435739/

but I can't help feeling there must be a much better way to achieve the transition.

Does anyone have any suggestion as to how I might do this?

Many thanks,

regards,
/alan