There was quite a few .049 outboards in the 50's, never seen an Atwood but the Wen-mac .049 also had a cable drive (the K&B Allyn had bevel gears). Here is a video of the Wenmac on youtube:
http://www.youtube.com/watch?feature...30hQZgNiQ#t=4s
You might be able to have a PTO and flywheel machined for it to make it usable, I had a Allyn as a kid and it ran well but not a power house