Just an Idea guys. Next time make this a beta with a revert feature. That way you can collect crash information without breaking the game completely.
While that may, or may not be a good idea, a better one would be to have a back up. Just create a copy of your (working) railworks folder on another drive, and if you encounter issues, just copy it back, overwriting when prompted. I appreciate that this doesn't solve the underlying issue, but at least you can carry on enjoying the sim while the issue is sorted instead of having a broken game.
If you are having an issue with the Menu crashing when the update goes in, please try this fix, if you find any other routes or locomotives that have the same issue please let us know : How to Fix the TSC Menu Crash After Update : Dovetail Support (freshdesk.com)
Strange that those "non-standard thumbnails" have worked perfectly for 10 years. Oh well, I guess I'll have to spend a few minutes updating them, now that I've happened upon this article by pure chance. In advance of an official patch via Steam, I've uploaded to my Google drive an "rwp" file, called Smokebox_TSC_Updated_Loco_Thumbnails_29Apr23.rwp, that contains all the necessary updated loco thumbnails: https://drive.google.com/file/d/10B_t0LkjjmTQFHAajVyw_KD6IWzzArjD/view?usp=sharing The rwp is a zipfile. The root folder in it is "Assets". Simply unzip that folder it into your RailWorks root folder (usually located at C:\Program Files (x86)\Steam\steamapps\common\RailWorks).
By the way, 256x128px is also OK. It's the compression and/or interlacing that isn't backwards compatible.
256x128 gets slightly stretched, the image displayed in the menu is exactly 256x144 (HD) - a 16:9 ratio, not 2:1.