It seems like a realistic, cost efficient rail connection between Downtown and Oakland is the white whale of Pittsburgh public transport. I have created a system that runs on existing rail rights-of-way that could hopefully solve these problems. You can view it here on Google Maps.
A few notes:
The first station is Penn Station downtown. This would connect to Steel Plaza, and would provide an intermodal transfer opportunity to Amtrak and Greyhound bus services (once the new bus station opens). It's possible you could get rid of this station.
The second station provides service to the Strip District. I have located it near 24th and Liberty so that it can provide coverage for the whole strip district and avoid being too close to Downtown. It also provides transfer options to the East Busway for trips to East Liberty.
The third station is Bloomfield, providing access to residential neighborhoods and Liberty Ave business district. It is also a couple blocks from West Penn hospital.
The fourth station is North Oakland, providing service for...North Oakland.
The final station is Oakland Central, and while it looks to be closer to CMU, the street level entrance would be near the Carnegie on Forbes. The actual station would exist in Panther Hollow, and
large escalators (red line on the map) would shuffle passengers up to Forbes Avenue. right into central Oakland.
