Guy at Colombo Fort station said all trains to Kandy are fully booked is he lying

Classic Fort station tout scam. They wear plausible-looking shirts, intercept tourists before the ticket counter, and claim reserved seats are sold out so they can "help" you for many times the real price. Walk past them to the actual ticket counter (signage in English, look for the "Foreign Tourists" window or the main counter) and ask yourself. Even if reserved class is genuinely sold out, you can almost always buy an UNRESERVED 2nd or 3rd class ticket for a few hundred rupees and just board. Real Sri Lanka Railways staff are inside the counter, not pacing the concourse hunting tourists.