Googleearth imagery shows an old formation between Gunning and Fish River on the Main South line of NSWGR.
Can anyone help me with a date for this deviation?
Looks like the line was lengthened, I presume that was to ease the grades by going around the north of the hill instead of straight over the top. The old formation is very clear if you push the time slider back to 2003.
The deviation was opened on 24 October 1915.
More detail is in the ARHS Bulletin April 1941 issue. This article was the fifth in a series written by C. C. Singleton covering the main south (and the main west) which were published over a number of years with a break during WW2.
It is available on a CD covering the Bulletin issues from 1937 to 1950 which is presumably still available from the ARHS.
Your assumption concerning the purpose of the deviation is correct but it was only one of a number carried out over a period around WW1 in conjunction with duplication and which resulted in the distance from Goulburn to Cootamundra increasing by around 13 kms.