The price of Diesel around here took a dive, it's the same as cheap unleaded instead of .20 over the good stuff. Nice to see for a change (esp. since I've been eyeballin a new turbo diesel car).

A thought I have on your engine question that may cost you less in the end run, how about droppin in a crate engine? A modern GM Vor-Tech engine produces some serious grunt AND gets decent milage. If getting a new in the box engine seems a bit extreme, complete engines with CPU & all can be had at scrap yars pretty cheap as well. With a 10-speed drive train you have more ability to keep a modern gasoline engine in it's prime RPM range & may actualy get better economy than an old diesel.

Otherwise, I'm partial to the old cab/new frame idea. Less special fabrication, and you start off with a proven drivetrain.

1956 GMC 370 dump " 'Tater "
1970 VW Volksrod "the Black Bomber"
2007 Chevy Avalanche
2020 Jeep Cherokee Trailhawk,
2005 Harley Davidson FLHTCUI

I dig all cars, old and new, whether they were hammered out of American iron, German steel, or Japanese tin cans. Being unable to appreciate them all is missing out on a world of great things.
But thats just MY opinion! :P