There are a number of other options along the full route for a substantial engine shed which may also be explored in the medium term.
- Swithland Yard - not somewhere the railway would particularly want to develop as it could detract from it's existing draw as a country junction for charters / photography, but a shed at the northern end could comfortably be accommodated and isn't too close to houses.
- Gotham Sidings - there was originally a spur here for livestock and pick-up goods - it's pretty far from any particularly large settlement which could make it a good option from an air quality standpoint, but being so out of the way could make getting staff and equipment in tricky and there's likely to be objection to a heavy rail construction in otherwise quiet countryside.
- Rushcliffe Halt - sizable area off Gotham Lane which could be developed, or alternatively on eastern side pending future development of gypsum works. May be logistically awkward for as long as gypsum trains continue to operate.
- Leicester North - potential for engineering workshops to be incorporated into the museum outbuildings - this has been discussed, though it's unlikely at this point that these will extend to locomotive servicing.
Ideally, the shed needs to be south of the Midland Mainline due to the operational restrictions associated with the Loughborough - East Leake section, though an agreement for more flexible operation will no doubt be forthcoming following reunification.
As others have alluded to, Quorn is a no-go as it's the railway's main "events" station and the open yard is very important for that fact. It's also where most loading / unloading of vehicles takes place - something that it's hoped will be less important when the gap is bridged and a mainline connection made available, but which will still need to happen regularly for the foreseeable future. I think we've seen the ultimate extent of developments there now, save for some minor extensions to the yard sidings where possible and perhaps some basic cover for the wagons in the southern sidings.
It should also be noted that these suggestions are for the most part volunteer hearsay and don't represent any solid proposals as yet. Of the four mentioned, I think Rushcliffe Halt would be the best option in a world in which the GCR / GCRN have full operational freedom, given the ample space available and industrial surroundings minimising residential impact, but Swithland Sidings is probably the best option from a logistical standpoint being as it is on the southern section and having significant infrastructure and staff access already in place.
Final and most important point - the current siting of the shed has enough space on its western side for two tracks to be laid, apparently (subject to the movement of the storage vans currently there.) I'm sceptical of that claim having walked down there a number of times, but a running line can definitely be accommodated, with a view to eventually relegating it to a siding or passing loop upon a new shed being built and the original alignment restored. If two lines can be squeezed in, that vastly reduces the urgency of moving the existing Locomotive Works.