Scott, 169.775 is the output frequency. I listen to this when I am in the Markleville area and have heard the engines no problem. Remember this district covers a lot of ground. It is possible the dispatch is using a repeater that is in range you can hear, but that the mobile is answering on a repeater that you can not hear. I have seen this happen many times. The dispatch of course can hear them all because they are using a remote base located on McClellan Peak to talk to all the repeaters in the district.
UPDATE: I just checked my federal info and it shows McClellan Peak as a simplex remote base tx/rx on 169.775. What that means is they are not using it to remote into the repeaters but simply as a remote base. That means if an engine has McClellan selected as the mountain top they would not be repeated. The remote base and repeaters are most likely linked back to dispatch by microwave or uhf link channels.