The Davis Diesel stuff doesnt run on regular diesel fuel. They are a "compression ignition" engine and run on a special mix. Ive seen some small 3 to 4 HP diesels but I dont know if anyone has made anything under 1 hp.
If you want something small and efficient look at one of the newer 4 stroke gas weedeater engines. They will run on straight gasoline with no mixing and at the power you need would be very efficient.

Im a Diesel believer and drive a diesel car but I dont know if anything that small is out there. The Davis Diesel stuff is nice but the fuel is supposed to be a bit of a pain to deal with.

Adam