b/h -I know and agree with all you say -I flew the classic 747 for 11 years and was LHS with 2 separate airlines.There are some grey areas and the BA 747 case of the engine failing ex LAX falls into that category.I am sure that under JAR regs there would be no reason to 'land at nearest suitable' with the loss of one(out of 4) but am not sure of FARs and indeed whether they are applicable.The original point I wanted to make is that the regs are different between 4 engine ops and twin -the point being a 747/A340 on 2 engines is not the same as a B767/777 !
Many years ago I departed HKG for Rome(FCO);at TOC we lost a hydraulic system.I/we made the decision to continue to destination with the knowledge that the loss of another system put us into the 'land at nearest suitable' category with a plethora of fairly horrible diversion airfields en route.No rules were broken and we landed uneventfully in FCO.With the benefit of hindsight was it wise?I am not sure is the answer,but I am certain that this crew went through similar thought processes and came to a decision they were comfortable with.
Interesting discussion though -cheers o/j