Nope, not banned- - - -just ridiculed and ostracized. We need somebody new to pick on, as we get tired of beating up on each other all the time. There's nothing really wrong with a Diesel in a stovebolt, as long as you don't mind driving around in a slow, stinky, noisy vehicle that belches lots of ugly smoke. The kids with their jacked-up 4X4's and exhaust pipes approximately the size of the English Channel tunnel love their coal-rolling toys. Dad had a saying years ago that went something like this - - - -"Diesels are just like sex- - - -highly overrated and stinky!"
Kidding aside, go ahead with your project. Nobody's really going to rake you over the coals about it, but be aware the engine is only the beginning. You're going to need to do your homework on transmission and rear end ratios, and give it enough gears to keep the engine in a fairly narrow torque band. You might also want to consider the engines used in the Isuzu cabover trucks and similar offerings by Toyota, Nissan, Mitsubishi, and others. They've already done the heavy lifting on putting together a good-working drivetrain that plays nice with the engine. The average back yard tinkerer doesn't have access to the same kind of engineering departments!
Jerry