quote; Which brings me to my question. What is the best/quickest/most efficient way to cut the line, cap it and then splice it back together, seeing that the line is double walled?
There is no "good way". IT was an idiotic idea to use thin wall PVC for the water line in the first place. Then it was even worse to put it inside another PVC line. Now, when you have a leak, no matter where it is, it only comes out of one end of the sleeve or the other. Even the conventional methods fo leak locating are useless because of the sleeve, although it MIGHT be found by listening for a sound which is imprecise also because of the sleeve. The smart thing, before you start sectioning the line, would be to dig a new trench and install a proper water pipe.