Boy, maybe I am missing something on the variable displacement, but why not have a couple (or few) of v-twins connected by a clutch? It can't imagine balancing issues could be any worse than the current crop of cylinder deactivation autos. Valve shutoff is moot. The clutch should last quite a while. You could even make one of the engines a lot simpler than the other because it wouldn't have a very big affect on emissions because it would only run during acceleration.
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