I thought I suggested single tracking earlier through "The Drag".
Yes, it is possible and there is no federal ramifications doing so. Dallas is building a single track streetcar line into Oak Cliff over the Houston Street Viaduct with federal funds.
The question to be answered is which existing lane should a single track take, east or west? That in itself will create issues amongst the business along Guadalupe.
Center running would displace more traffic lanes than side running because you would have to build platforms at each station, and they would take an additional lane away. Side running would allow using the existing sidewalks as platforms, although the platform sidewalks would have to be raised (rebuilt) for level boarding. Single tracking in "The Drag" will still allow 3 to 4 lanes for traffic and parking. I would suggest a typical 3 lane configuration with the center lane for left turns, and any additional lanes left used for parking and bikes.
Over "The Drag's" mile length, it might not need double tracking at all - depending upon the headways between trains or streetcars. At a porky 10 mph average speed, a train could traverse that mile in 6 minutes. A train in the opposite direction would take another 6 minutes. Leaving no room for errors, that would allow 5 round trips per hour with 12 minute headways. Leaving room for errors, 4 round trips with 15 minute headways should be achievable. If shorter headways is desired, then double tracking will be required. In which case, I suggest moving the tracks above or below the existing highway lanes, it'll be cheaper on the taxpayers to go up.
The problem I saw and still see with the 2000 light rail plan was taking three lanes from traffic, two for the light rail tracks and an additional lane for station platforms, because that plan insisted upon center running trains. If the plan had been side running instead, using the existing sidewalks for station platforms, only two lanes would have been required. I'm sure center running would have had faster trains, but it wouldn't have saved that much time in just a mile. South of MLK the 2000 plan had the trains running in side lanes on one way streets, and north on Lamar there was and still is plenty of room for center running tracks. The fault of the plan was where they wanted to run the tracks in "The Drag" imho.
As for the 2000 referendum, if Austin had passed it with 60% of the vote (veto proof margin) the suburban vote wouldn't have mattered!