I saw the news at 2010/7/30, it said "it is not in operation until 2010/08/01. So I think after 2010/08/01 it is in operation again. But you should take care of the weather report. The organization gave you their telephone number 886-05-2679200 to contact. 
The train fares and train timetable you can see on http://chiayi.forest.gov.tw/ct.asp?xItem=51979&CtNode=4471&mp=340. It is in Chinese. If you need help, contact me. 
I took the train two times a long time ago. It is really exciting. Hope you can visit Alishan.
  
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Is Alishan Forest Railway currently in operation again?
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Good thing that Alishan forest railway is already in operation. Thank you for sharing this wonderful information.
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