Primary purpose of the thermostat is to get the engine up to operating range, not keeping it cold. Keeping the engine around 200 degrees improves...
Bottles work great, use them in many builds. Problem is that being round they 'lose' a lot of space when holed. Good thing is that you can...
Was browsing, found this which seems to be pretty much what the OP is after : http://www.recumbents.com/wisil/hpb/boat98.htm
since you're 90 degrees to the shaft, a bicycle style pedal drive is very good for it. perhaps modify so it uses an automotive style timing belt...