Well, you certainly never visit the John Deere sites. The mention of a Kohler K series will bring a chain of negative responses pages long. Especially the series one version. I personally have no issues with them other than they being very old technology. Same with the Onans we deal with and all others of that era for that matter.I've never had a diesel, but I'll be honest, that would sure be an interesting swap. Will a Briggs opposed fit in between the frame rails of a 129?
If I were you, I might keep an eye out for an existing diesel GT. I know Cub Cadet and JD made them. Is that Yanmar engine you pictured vertical shaft? I see something sticking out the underside.
EDIT: I think a repower in an old Cub is a great idea. I know everybody is like "The Kohler K-series is the best engine ever!" but I can't see why.