While I can't help with the decoder specific question, I have commend on the LEDs.
Instead of hooking up the LEDs in series, requiring rather high voltage., why not hook them up in parallel (with each LED having its own current limiting resistor)? Yes, the wiring is slightly more complex, but not impossible. Resistor (a small SMD 0603 or 0805 size) could be installed directly at the LED's lead, so you woudl just need 2 wires for the string of LEDs.
While the typical operating current for larger size white LEDs is often specified 20mA, most smaller SMD LEDs (0402, 0603, 0805 size) have operating current of 5mA. Either way, even 5mA is often too bright for applications other than headlights. Often 2mA (or even less current) produces realistic brightness. With that in mind, you could easily run a string of parallel-connected LEDs using standard function output, and the decoder's common positive power (either 5 or 12V).
As far as creating an external source of positive voltage (the blue wire), you can build a very simple circuit that will do that.
Instead of using 2 discrete diodes, there are pairs of common-cathode diodes in a 3-pin packages available to simplify the construction.