I'm pretty sure we could design something based on a propane water heater with minor modifications. I've seen these which are quite small compared to a storage heater and put of 12KW.
6L LPG Instant Water Heater Durchlauferhitzer Boiler Wasserboiler 12kW | eBay
The other thing I'm planning is to modify a faulty diesel heater to run on LPG with a custom control card. This is to suit my electric car, since I cant stop and fire a diesel heater in a short period of time if my heat load is low, which is not an issue with a clean burning fuel such as propane/LPG.
Most of the faults with the diesel heater units are either clogged injector, faulty glow plug or faulty PCB. One could get them at a bargain price as such and replace the metering fuel pump, which is also expensive, with a cheap LPG fuel injector. This is just like a household boiler, where propane is burned in a closed chamber with a metered amount of air/fuel, which also makes the unit very compact.
Efficiency wise:
Fuel used.. Depends. The last petrol car I had was extremely inefficient at idle. If I had to idle in the morning just to heat up the engine for 10 minutes I could easily use one liter of fuel. In a week that's at least 10liters more. It was a 1.4L, so nothing major here.
The diesel is direct injection with a custom made mechanical injection pump, lithium startup battery and manually activated glow plugs. Fuel consumption increases, but its not more than 1l/100km, which could easily be blamed on the additional load running the blower fan and lights on winter or even the low fuel energy content due to winter additives. The electric heating on most diesels nowadays makes them warm up moderately fast both by providing both additional heat and engine loading, but this has a price on fuel efficiency.