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There are not too many light diesels around that would be perfect for a hovercraft. There is a diesel developed for use by the army in a modified Kawasaki Kl650 http://www.dieselbike.net/militaryproduction/militaryproduction.htm. I've found this link to an actual real life diesel motor http://www.dair.co.uk/ Price is probably high, I'll be fitting a Japanese or German diesel car engine to the Prospector I hope to build after the Surveyor, partly because I'll be able to afford it .
I was considering a VW Derv for an explorer. Just buy complete VW van and scrap what wasn't needed afterwards. You can pick up some cheap vans on ebay & gumtree. Weight maybe a bit of a penalty but with something the size of an explorer it shouldn't be too much of a burden.
From 1 November 2008, fuel purchased for propelling private pleasure craft can no longer benefit from a reduced rate of duty but is subject to duty at the full rate.