I've looked into the diesel bike with VW 1.6 and the difficult part is finding a suitable transmission where you can gear it proper and it be reliable. I have seen jack shafts run off the crank, but that puts a side load onto the crank it and it's bearings weren't designed for. It has 5 main caps/bearings but it makes me nervous to do that. The intermediate shaft in it runs the oil pump and vacuum pump. It rotates opposite of the same shaft in a gas motor. If you get the timing belt tension too tight it will destroy the intermediate shaft bearings.
I have seen pictures of a bike in europe that uses the VW transaxle and the CV output runs the rear wheel via shaft drive. Also seen one that uses belts and jack shaft to put the pawer thru a 2stroke bike transmision. I'm at work on lunch so can't link any pictures.
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