Look to the middle of the car that's angled down, then below it. There's several men standing on the locomotive cab, which is on its side. The engine is mostly submerged in water.
The picture was originally taken by Joseph Leighton, a wandering photographer but he lived in the Sheepscot area. As for the color, photographs were sent to Germany where they were hand colored by artists there and sent back. Since the artists were German, they would use the colors that the German artists knew, not the actual colors. So roofs might be red, etc.
That scene has changed quite a bit. It's all wooded over now. Certainly with our drought there's a lot less water in the stream than in this picture.