Hmmm ... sounds like you may have a few issues going on here. Redwood is hard to glue due to the the resins in the wood that always seem to confound most glues. In terms of using a spline, you will want something that is equally weather proof (which also means probably harder to glue also due to resins in the wood). You might try some straight grained teak if you can find a small quantity. Make your spline cut first, then cut your spline to fit snugly and glue it in.
I am concerned about the 1/8 gap however, it would be nice to fill this with something to keep water out, otherwise I fear it is going to get worse.