Yes of course it would run, but only at full rich, not leaned.
AVGAS has fairly similar octane ratings to 98RON fully rich. Not leaned,
And I would say actually that any (aluminium) automotive engine would run perfectly happily for far more than 2000HR flat chat. Liquid cooling ensures they stay at the same temperature regardless of power output
Aluminium starts to fatigue at Temps above 350F, liquid cooling around the heads would prevent this, liquid cooling around the heads also lowers temps around the valves so they no longer require sodium filling and can run hotter allowing a more complete burn at stoichoimetric ratio. All without avgas. Or dual spark.
Liquid cooling also allows the use of higher tolerances, and better oils.
Ensuring less wear, and less oil bypass/ burning.
But no, automotive engines do not suit aircraft as everyone knows.
Automotive engines are designed to run on a very wide RPM band, obviously meaning they aren't efficient doing 5000-7000rpm even with variable valve timing.
Have you looked at the conditions the BSFC you are quoting was tested though? ( it changes with conditions)
The lyc and conti's are great engines, they've had a great run. But we are in 2016.
Materials have come along way since the 1950's, I know both lycoming and continental have improved the basic design with better materials like nikasil cylinder liners and sodium filled valves and better manufacturing processes. FADEC helps,but the IE2 still runs a distributor, which in cars was dropped in the 90's!
If we want to get GA back to the glory days manufacturers must get out of the past glory days.
A liquid cooled, flat 4,6 or 8, aluminium, turbocharged and inter cooled, with similar weight to the lyc's or conti's is certainly possible, and would easily produce more power.
lycoming and conti can't afford to,
An entire new engine can cost 100's of millions to design, test and produce.
Not to mention the cert cost.
The main reasons they haven't is not because the current crop are the best,
It's the cost, they can't afford to design end certify an engine that's a complete drop in replacement for old aircraft, at the same time as meeting the needs of modern aircraft.