UPDATE. . . I'm well into my 4th season of mowing on diesel power, and the mower is doing great. Since last year I've had a much larger lawn to mow because I moved to a bigger place. Takes about 1. 5 hours each week.
Since the last update I shifted the position of the magneto coil in order to the retard the timing. It is now just a couple degrees BTDC in an effort to reduce detonation under load. It helped noticeably, I can load it down fairly well without it rattling at all.
There is a fine crossover point between when it's running smooth and when it starts to clatter. When it does clatter it's pretty violent. It doesn't smoke at all until it starts to detonate, then it's bluish black. The smell changes from something like a 3rd Gen on a cool morning to that of an old Detroit 2-cycle.
With as many times as I've done this (hundreds and hundreds of times) I'm surprised I haven't chucked a rod or blown a hole in the piston. The neighbor two houses down could clearly hear it. . . one day he says "man what's up with your mower? It sounds like metal on metal. "
This winter I am going to do a teardown and inspect the internals to see how they are wearing, and see if the rod is pounded down or if there's broken rings. Compression is good and it doesn't use oil, and it doesn't knock at all so I think it's pretty sound.
A light engine needs to have a good seal (be in good condition) to run on diesel, because I've tried this on a couple other engines and it did not work at all because they had some wear.
Vaughn