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There are diesels from china that put out ~25hp and go for ~$1000, but they weigh a few hundred pounds more than that Kubota engine. Two of the little 10hp ones would only be ~100bs more and put out ~20hp for ~$1000, but for the cost your best bet would be a small car (~1.5-2l) engine that can bolt up to a transmission w/ a buncha gearing options. If you absolutely positively have to go diesel, I'm 99% certain a 1.6L VW diesel with the proper gearing could pull ~110-120mpg in that vehicle with way more power available. Depending on the driving route/conditions, a small gasoline engine would do roughly the same w/ even more power available.
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