Would you not use LNAV if you had update 7.5 or on a 700 as the missed approach takes into terrain clearance?
Just wondering, it's not normally briefed or assumed for an engine failure on approach and go around situation. I think heading select at 400ft is great where you are familiar with the terrain, BUT maybe we dont want to be yamming around a complicated missed approach when we have got more important things after engine failure like Recall items, QRH and my latest favourite passenger donated cockpit read, Nuts.
TRon