IO540
What rules are being bent? Were they even doing full engine checks, or just checking out a suspected problem? I would think they only do full checks once a day.
Why would 1500 hours TT not go a great way to compensate for lack of autopilot? I find it surprising, even astonishing, that you don't think it does. The experience transforms a pilot who has the right attitude to flying. It helps me when my autopilot fails, as inevitably it has done. Workload increases, but I can cope without problem where I would have struggled a lot more at 300 hours when I had a shiny new CPL/IR.
Why would an autopilot be necessary on a short, familiar route anyway? In practice the main reason I need it is so I can find information in Jeppesens or my flight briefing papers that they will have memorised or have close to hand, and to relieve the fatigue of flying the long sectors under IFR that they don't experience. I suspect that is the reason for the CAA's concession, but I have no problem flying entire legs to position the aircraft after autopilot failure.
Where exactly are those extra-high risks in this operation? If operations are correctly overseen by the national aviation authorities, with experienced, current crews with semiannual flight checks, working restricted hours with good training and sound maintenance then very high standards of safety are now being achieved.
Risk statistics for single turbines as compared to light twins are not always presented honestly. However the main reason that the former will not be allowed to fly until engines are infallible is the matter of responsibility. If a single-engined aircraft has an engine failure in IMC and then fails to make a safe forced landing the responibility immediately falls to one man: the man that signed the piece of paper saying that single-engined public-transport operations would be allowed in IMC. Rightly or wrongly no-one in their right mind would sign that piece of paper in today's culture.
I am sorry, but until you have flown regularly under these or similar conditions you cannot really understand the job. It is different from anything else in aviation, but is still a skill that only needs to be learnt, consolidated and kept in currrent practice. What exactly is your aviation experience? How do you know about commerial IFR operations?