I think it's a key point you make (and maybe THE key point) about fuel being the enabler for small steam power systems. Liquid fuels will always be relatively expensive, while solid fuels like sewage sludge, logging slash and corn stalks are relatively cheap and renewable.
The Mark 5 engine was designed to be a power source for cars and boats where it needed to compete in size and weight with internal combustion engines. That limits it to liquid or gaseous fuels since a furnace for burning solid fuel would be too cumbersome. The need to turn the fire up or down instantly (e.g., at a traffic light) also makes solid fuel really difficult to use.
So then if you're burning liquid fuel, efficiency becomes a critical selling point. After all, if you've got to fill up your car at a gas station anyway, why would you buy a car that got fewer mpg? Here's a bit from the boilerplate at the end of every press release:
Harry's been calling himself ingenious for many years because of the "high efficiency" of his engine.
As for those engineers, there actually were experienced engineers pointing out potential problems several years ago on the steam car club bulletin board, including the condenser was too small, water lubrication is a huge challenge, the valves can't survive those speeds, supercritical operation isn't feasible on this scale, and so on, but every single time Harry would say it wasn't a problem for him and the engine is running now on the dyno. (Usually it was the engine was "runnin' sweet on the dyno".)
If people pressed him for evidence to support his claims, he'd say either that it was proprietary, or that the SEC wouldn't allow him to reveal that information.
So, in retrospect, there were engineers calling out the problems, but there's only so much they could do without calling Harry a liar.
A number of engineers were invited to sit on the Technical Advisory Board, but they were never asked for their advice, and they all drifted away. Jim Crank periodically makes some reference, for instance, in a message to Chuk Williams on the steam car club forum (http://www.steamautomobile.com/ForuM/read.php?1,14474,22675#msg-22675):
He used to be their key advisor when they were trying to gain credibility with investors through name-dropping.
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