Been there done all that. Just use the cheapest engine you can find that will get the job done. Use exhaust heat for a simple hot water. Go to charcoal, build a system to make charcoal and produce primary heat.
Using a liquid cooled engine for heating is very complicated and you can not use all the heat from engine, you will destroy it. The engine must maintain 165*f to maintain proper tolerance. This leaves very little for heating, you then have pumps, fans, heat loss in transfer. By the time you reclaim this heat that reclaim is lost in energy consumption of the system.