I used concrete blocks as a base for my track. I would dig a trench for the blocks and use the excess soil that was removed and use it to make the embankment. Much simpler, less measuring and cutting and nothing to rot or expand.
I've used this method for many years and with sometimes multiple layers of blocks to raise the track bed to obtain a level track base. The soil excavated is used to create hills and embankments.
The photos above shows a section of track that was laid 20 or so years ago and was recently widened to double tracks. The extra width was simply back-filled with stone chippings. The problem as you have discovered, is the blocks settling and I would suggest ramming or packing the base soil to minimise the settlement. I have a solid sub-soil not far below the ground surface and once I've dug to this region the blocks have not moved. You can see the blocks above ground level and the ground drops away to the left of the second photo.
The photo above shows another section of track bed to be re-ballasted. There are blocks there but the gaps are hidden with dust. At the top of the photo there are at least 3 layers of blocks, possibly 4 because the track is starting to rise above the natural ground level. The blocks are all loose laid. The next photo shows the track bed ballasted. The ballast I used was grano dust (bought locally from B & Q). I levelled it as you would a concrete floor and then sprinkled some latex based bonding agent to hold it together. It now has the integrity of concrete with a gritty ballast appearance. As it is latex based it is also flexible so I am hoping that it will last. This particular section is my second attempt to ballast it. My first attempt I laid the ballast around the laid track and it fixed the track really good. The bad news was that this section gets sunshine all day and after heat expansion I had severe track buckling of the tracks right at the top of the photo where they cross the bridge over the lake.
The last photo taken from the opposite direction shows the same section freshly ballasted and the builders have left their levelling tool on the embankment by the waterfall.
Alan