I agree that the Hiawatha Service would be a good candidate for HSR upgrades. I think many of Amtrak's corridor services would do better if speeds could be increased, even marginally.
However, at least under the Obama Administration, I think the chances of Wisconsin getting any major money for HSR is miniscule. You can't turn down federal dollars (and insult the concept behind the money) and expect to get more later. Maybe if Wisconsin had a different gubernatorial administration, but that won't happen until the last 2 years of Obama's presidency, assuming he gets reelected and Walker does not.
That is, if Walker does not lose in a recall election. He has ticked off enough people with his recent actions on the whole collective bargaining thing, that he may face a recall election next year. But that is a topic for another forum.
As for the Hiawatha service, it would be a good candidate for more funding. I think for the mid-West Chicago corridors, the funding for the next several years - whatever there is - should be focused mainly on Chicago-St. Louis, Chi-Detroit/Michigan, Chicago CREATE projects, and if the politics were not so complicated, Chi-Milwaukee.
But the politics of this are messy. Gov. Walker may be submitting these applications, figuring the Obama administration and the US DOT won't grant them, just so he can claim the Obama administration is playing partisan politics and play to his own base. Will be interesting to see what LaHood does.