Wouldn't an easy way to get around air utilization rates be the use of high octane gas? I've seen people kicking around the idea of dropping the CR to ~17-18:1, so something like E100 shouldn't detonate. Pull the glow plugs, slap spark plugs in, and install a grid heater. Tap the intake mani for injectors, or just use a TBI setup w/ MS&S. Have it engage progressively as the amount of diesel fuel injected drops off. From what I've read, it seems the head is ok up to 7000rpm (gotta watch the timing

), so the only thing I don't know about is the IP. Could it handle consistently going up to 7000rpm? Anyway.... this is just some more of my rambling, so fire away!
They've been tinkering w/ variable compression since the late 90s, so neat. I can't wait to see what makes it into production but it must be ungodly complicated... Iirc fspGTD dropped a TDI VNT/TD pump on an old NA IDI and saw ~80whp. If the engine can continue to make 100+ftlbs until ~6500rpm, it'd be making nearly 120whp.
M-B will be powering an S-class with a 1.8L. That's like an ocean freighter being powered by an outboard.