Though  normally just a lurker,  I have followed this thread with great interest. I have to confess that while not a purist I have never even driven a water cooled VW. I have however been involved with the air cooled since 1956 & used to  finance my motorcycle racing by  rebuilding air-cooled engines. I have driven 36hp aircooled vans into a headwind when I thought it was going to blow me backwards. I have rebuilt the engines in & driven many 40 hp vans which weren't much better. The 1500's & 1600's were getting more roadworthy but still didn't really cut it in a van. I wasn't terribly impressed with the early type lV engines but when the 2000 cc engines came out & had hydraulic lifters I thought I had died & gone to heaven.  Although I live in the flatlands(Indiana) I have made trips through the Poconos in my 78 aircooled Westy& while not the Rockies there were some pretty good hills.  I don't remember anyone honking or displaying a middle digit.. I wonder if this poor performing
 aircooled that died was ever up to par to begin with. I don't know what kind of performance a later watercooled diesel would give & most  everyone knows the 1.6 diesel performance is lacking  but I think an air cooled 2000 cc in good shape will stay outta the way of traffic in most parts of the country. I currently drive a 82 Westy & envy the waterpumpers only their heaters. I know 36hp, 40 hp, &  all aircooled uprights have propelled vans around the world and  I wouldn't hesitate to go anywhere in my 82 & I would only consider a diesel conversion if I took on another job or two & didn't need it anytime soon. If performance is a big issue there are of course bigger cylinders, etc for the 2000's which would add performance without compromising reliablility much.  I'd stay with the aircooled unless I could buy a proven, already watercooled, van. That's my .02., Dave Rogers