Wow, there's a ton of knowledge and large pile of sarcasm in this thread. Even some BS. Makes it fun to read.
Gasoline vs. Propane: Energy Density is the amount of energy that can be released from a given volume or mass. Gasoline is actually quite high, which is one of the reasons it's been the fuel of choice for so long. Propane and Hydrogen have a much lower energy density. In practice, when you mix the low energy density fuels with the appropriate amount of air, there are limitations for output.
Heating the air means you'll get less air into the cylinder each intake cycle, which effectively acts to throttle the motor. When I say "throttle", I'm referring to whatever is used to reduce air volume to the point where the vehicle runs at the speed you want. It takes energy to suck air through a tiny hole. Try breathing through a soda straw while exercising, and you'll slow down too. Changing A/F to 16 (as mentioned) has compounding effects of lean burn with effectively reducing throttle losses.
Pumping losses are actually a huge portion of the "effective" loss of a motor. The creation of heat that must be removed by airflow or radiators has been mentioned, and that's big too. Old school rules of thumb say 1/3 of the energy went to heat, 1/3 went to throttle losses (pumping losses) and 1/3 to mechanical energy that drove the vehicle. It's not that simplistic, but you get the idea. AND, that matches the 30% - 40% numbers thrown around in this thread.
The problem is we want to accelerate the vehicle which takes much more power than steady state, so the engine has to be capable of that. However, when cruising, it means we have to feed it less, which traditionally means to throttle it more, which means increasing pumping losses while cruising on the highway.
Diesel has a lower energy density, but can actually get higher "mileage" in part because they usually pair it with a turbo (compressing air to jam more in the cylinder -- effectively increasing it's energy density) and it doesn't have a "throttle" like a typical gasoline engine -- therefore reduced pumping loss.
Lean burn? Yeah, Oil_Pan summed that up.
In all your examination of the vapor vs. liquid fuel, keep in mind there is a lot more going on in an engine than initially meets the eye.
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