[freebeard]

Problems include ignition timing, and the 'air springs' generating heat. Here's a solution from Toyota:

Green Car Congress: Toyota Central R&D developing free-piston engine linear generator; envisioning multi-FPEG units for electric drive vehicles

The “W-shape” piston design offers several advantages, Toyota says:

The larger cross-sectional area of the gas spring chamber leads to lower compression temperature of the gas spring chamber and consequently decreased heat loss.

The piston has a hollow structure and moves along a column stay, which in turn enables the construction of a cooling oil passage within the stay. The key technologies to deliver stable continuous operation of an FPEG are lubricating, cooling, and control logic. (The Toyota team’s second paper deals exclusively with the control system.)

The inner periphery of the hollow piston also serves as a sliding surface on the column stay, enabling a steady small clearance between the magnets and coil for improved generating efficiency.

The magnet is set far from the piston top, preventing magnet degaussing by heating.