Well, I can report that Hard mode is entirely possible to succeed with.
After a couple of test games to get my bearings, I started my first full-playthrough game, set to Large, Hilly, Hard difficulty, starting from 1850, and going for the “Penny Pincher (hard)” achievement, so limiting myself to the initial 1.2M loan.
I’m now at 1935, and bringing in a health 3-4 million per year. The first 30-40 years were far and away the hardest – I had to plan absolutely meticulously, didn’t introduce a single train until about 15 years in, and even then, had to be extremely careful laying track with minimal landscaping, and be very careful about setting trains running on the line with a reasonable number of cars.
One thing that can *really* turn the tide, is finding a cargo route where you can make use of both directions of travel. One of the most useful lines in my game was a truck route that took wood from a forest right next to one of my towns, out to sawmill a little further out, and then brought the good back to town using the same truck fleet, without significantly expanding the length of the route… that really brought in some big monies 🙂
Bear in mind that any time you set up a new passenger train service in Hard mode, it’s going to run at a massive loss for at least the first two years, because it will take a while for people to start using the line in large enough numbers… so you have to factor in weathering that loss.