Yes, we went there last October and had one award ticket. Though we are Europe based, I suppose you have the option of connection in Europe anyways, so it shouldn't make much difference.

To get to KTM on DL miles, the easiest way would be to get to DEL first. Once in Delhi, both JET and Kingfisher have flights to KTM and you can redeem SM on both of those airlines. Just to be clear, you can get ONE award ticket to KTM with the last leg DEL-KTM on Jet or Kingfisher, so absolutely no need to buy the DEL-KTM leg unless award inventory isn't there. One ticket is much nicer because of the luggage allowance :-)

Basically, you need to search to DEL from the US and not KTM. Then once you find availability to DEL, you can search separately for DEL-KTM (I used Expertflyer on this for Jet flights). Then call up Delta and get it booked. It took me a couple calls last year to get someone who's capable of doing this, but otherwise, not difficult. If you search to KTM directly on DL's website, I don't think it'll show you anything.

Some other cities with flights to KTM would be BKK, and some places in China. I'm not sure about BKK-KTM carrier, but don't think the Chinese cities -> KTM include carriers which you can redeem SM for.