Shame about the Bullet. If it's really that bad, perhaps I'll put my pipe dream away.
Well, that article pretty much covers the scene.
The Govt' gets a diesel Kawasaki KLR. I think this was the next step after the short lived Rotax powered Harleys... part of getting the military to run on one fuel (diesel, jp... it's all close enough).
There are groups of people out there who have made diesel powered bikes. The Germans hold a rally.
Unfortunately, a lot of the stuff I have heard of stateside is mated to a CVT. Punsen engines are pretty popular, as are some chinese bits.
Diesels would make excellent adventure bikes. They haven't the same fuel quality concerns, and at around 100mpg, you can get a whole lotta range on an average sized tank. With a mechanical injector pump and a manually controlled fuel valve (as opposed to a solenoid), you wouldn't need an electrical system to keep the bike running.