Well Dave...this morning I glanced through all the issues of Model Railroader for the interval cited. While not going page by page, I did look at the table of contents for each issue and examined any article whose title suggested it might fill the bill. As I rather expected, with dimensions so unusually small for HO, over the entire span of six years only two potential candidates turned up. Unfortunately, neither seems to match what you described very well.
The first was A Changeable Railroad by R.R.Gilbert, in the June 1962 issue. It was a little flatlands layout 3' 2" by 4' in size, consisting of a simple loop of track (having 16" radii !) with two short spurs, fully scenicked, with some interchangeable, early 20th century rural scratchbuilt structures.
The second possibility was The Grey Burro Lines by G.N.Baustert, appearing in the August 1962 issue. It was just a detailed trackplan for a 4' 2" by 4' 2" layout with a turn of the century, rugged Rock Mountains theme. There was no actual layout, just the diagram. The trackplan indicated a significant amount of trackwork for so small a layout plus the drawn-in locations for quite a number of buildings, as such pencil-and-paper-dreams often do.
I suspect that neither of these is the layout you refer to. Memory can play some strange tricks on us after more than 40 years and I have to wonder if your layout might not actually be outside the time frame you cited. Unfortunately, I have no way of copying the articles in question as they are in bound volumes that could not even begin to be laid out flat on a scanner without damaging the spines. If seriously interested, I'm sure photocopies of the articles could be obtained through MR or the NMRA Library.
CNJ999