I have arrived, I believe, at a resolution of the fallacy, which, from the tortuous, eventful fate of this thread—its being closed and subsequently eventually re-opened after much pleading and explanation—I deduce, confuses many people indeed, even the experts. Nonetheless, I would like to thank
@TSny for providing the much-needed support, clarity and inspiration.
So what's more apt than to start the answer with TSny's words:
The train observer can indeed measure the length of the train by multiplying v by the time interval she measures between events BD and AD.
Also, the Earth observer does indeed measure clocks in the train to be ticking slower compared to his own clocks on earth.
Nevertheless, when the train observer calculates the length of her train using the method mentioned above, she will find the length of the train to be longer than the length of the train as determined by the Earth observer!
How can this be? Well, the key is to realize that the train observer must use two different clocks. The time of event BD according to the train observer is measured by a clock located at point B of the train. The time of event AD according to the train observer is measured by a different clock located at point A of the train.
Can you see a way in which the time interval between the two events as measured by these train clocks can be longer than the time interval as measured by the Earth clock (at D) even though the Earth observer measures the train's clocks as ticking slower than clocks on earth?
The space below is intentionally left blank so that you have a chance to work out the answer on your own first before looking at my answer.
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If your answer is
Since the train observer measures a proper length, it must be longer than the length measured by the Earth observer. So the time measured by the train observer must be longer, since ##t=\frac{\mathrm{length\,AB}}{v}##.
, then you have not resolved the fallacy! You need to explain what's wrong with the fallacy, not just give the correct answer using a different method. Why don't slower clocks lead to a shorter length? My answer is below. So one last chance to work out the answer on your own first before looking at it.
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Synchrony is the answer. Synchrony is not the same as simultaneity (though they are related). We don't invoke simultaneity because the train observer is not measuring the length AB via length measurements at the same instant. The two moving clocks on the train, the one at A and the one at B, indeed run slower than those on earth. But they are not synchronized! The clock at B is always ahead of the one at A by some fixed amount. So although the time elapsed by the two moving clocks are the same, say 15 s, and both are slower than the time elapsed on earth, say 20 s, the clock at B is always ahead of the one at A by say 7 s. In this case then, the time measured by the train observer (between event BD and event AD) is 15 + 7 = 22 s, longer than the time measured by the Earth observer, i.e. 20 s.
These 7, 15, 20 s are just wild guesses. I am sure all these figures can be made accurate and expressed in terms of ##v##, etc. But I am really busy at the moment for the next few days. So I shall just stop here and work out the math next time.
Below is an explanation on the non-synchrony of moving clocks: