Diesel "7"s have been done, I've seen a 1.9XUD turbo powered 7, mated to a Rover gearbox using an LDV Pilot van bellhousing or something equally bizarre. I "honestly" can't see the point, it's just wrong, you'd be consigned to the back in convoy too, not many would fancy chewing derv fumes...
The new Locost[1] and "book" is reviewed in this month's PPC too, seems to get a decent review, and Haynes have admitted building one for £250 quid is impossible, they now say you can build one of the new ones for £1k... yeahhh....
[1] Not officially called a Locost anymore, it's a Sierra based "Haynes Se7en" FFS.