Wow. That's one of the darnedest documents I've ever seen!
To answer your question, engine developers estimate life expectancy all the time without testing out to full lifetime. Before assembly the engine is examined THOROUGHLY, by that I mean they measure everything to microns and before assembling the engine and record all the data. After the test period they tear the engine down and remeasure everything. Based on wear and fatigue they can estimate how long the engine is likely to hold up. It really helps, of course, if you have a lot of experience and a database for this kind of testing because much of the wear and fatigue does not undergo a linear progression. When you start doing things like trying to lubricate with water, there is no good database to work from and the quality of the projections is likely to diminish.
As for some of the rest of the stuff, with a 5,000 hour life expectancy I would expect to see endurance testing more on the order of perhaps 800 hours at full speed and power. The requirement the engine develop from 10 to 20 HP is also a bit unusual; no one gives you that kind of latitude..usually more like 1-2%. Life expectancy is related to load and speed, and it isn't a linear relationship, increasing rpm increases friction, and wear while increasing torque causes earlier fatigue. Since power is related to torque X rpm, you could pad your chances of success by looking for the sweet spot between the two variables; that might be meaningless if you generator doesn't turn at that speed.
I don't know, this certainly doesn't look like it was written by people with any background in engine or product development.
Tom
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