Ozbusdriver - Good article that gets to the nitty-gritty, and exposes the deception.
I have to disagree with Wally Mk 2 - diesel cars are not the huge financial advantage they claim to be, the same as in aviation.
A diesel is vastly more expensive to purchase and diesel fuel costs around 20-25c more per litre. A diesel car has no advantage whatsoever in short-trip city operation.
Diesels perform best at moderate RPM's, and at a steady RPM. Constant speed fluctuations and high RPM's see diesels advantage evaporate rapidly.
Diesels are a much longer life engine - but it's at the expense of much higher build cost, due to expensive components such as fuel injector pump and injectors - and a need to have heavier, more robust components to withstand the much higher compression ratio, and the vastly extended period of high combustion pressures.
You're on the money with the Subaru. They have an aviation design origin for a start. A flat engine design is ideal for aircraft, the crankshaft weight is substantially reduced and counterweights are unnecessary.
However, water cooling is an unnecessary weight burden - air cooling works just fine, particularly where weight reduction is crucial.
The avgas problem isn't going to go away, we need a basically simple, new, lightweight, efficient design, GA engine in the 100-200HP range that runs on JetA1 or diesel, and doesn't have horrendous O/H or repair costs - and I'm amazed that no-one is putting some major effort into producing the answer.
I feel a combination of newer technologies (such as Mazda's SkyActiv-D low-compression diesel design, coupled with flat, air-cooled design) - combined with other new engine weight-saving technologies (composites, new alloys), is what is needed to produce the affordable, efficient, new JetA1/diesel aviation engines we urgently need.