I found these diagrams online, and from the wording on the documents it looks like they're leaning towards exactly what I favour (grade-separated along Richmond/Byron). They actually specify "if at-grade", which makes me believe that that's an alternative as opposed to the preferred option.
Here are the 3 documents:
http://www.ottawa.ca/residents/public_consult/lrt_west_corridor_ea/images/oh1_db24.pdf
http://www.ottawa.ca/residents/public_consult/lrt_west_corridor_ea/images/oh1_db25.pdf
http://www.ottawa.ca/residents/public_consult/lrt_west_corridor_ea/images/oh1_db23.pdf
Here are the 3 documents:
http://www.ottawa.ca/residents/public_consult/lrt_west_corridor_ea/images/oh1_db24.pdf
http://www.ottawa.ca/residents/public_consult/lrt_west_corridor_ea/images/oh1_db25.pdf
http://www.ottawa.ca/residents/public_consult/lrt_west_corridor_ea/images/oh1_db23.pdf