I definitely think it's possible!
You can make the hidden area with the tower, as you've suggested, and have a waterfall near it (I've
definitely seen a waterfall function amongst the landscaping tools) and a stream, and then have the forest spreading out around it. While you may not be able to make the
exact castle, you could use the Cinderella castle pieces to create something similar, and have it raised on a slope, with the village surrounding it, and a long bridge connecting it to the forest. It's possible there'll be a few generic buildings (something not themed to a specific movie) to form the village and you can fill it with the cute little blockhead NPCs, who'll certainly have some outfits that will fit as villagers. And you could build the dam-bursting scene, with the grind rails substituting for the wooden water drainage system Flynn skates down!
There's all sorts of ways you could bring Tangled to the Toy Box! And beyond the tower and the power discs, there may even be some
more Tangled stuff included, you never know!