Also to come at this for the other direction, would it have been possible to put a 200hp ish diesel engine, dynamo, controls etc. in an underfloor configuration using late 1950's technology, and staying within UK loading gauge?. The SR DEMUs lost about 1/2 a carriage to the engine dynamo and controls. In which case it was more a case that mechanical transmissions were the only way to engineer a 2 car without losing 25% space to an engine compartment.
The 1930s GWR worked with their longstanding contacts at bus and lorry makers AEC on their first railcars. The time coincided with AEC buses making a pioneering transition from the engine up front and upright to the first ones with the engine back in the middle, positioned between the frame members and the floor above. One of the things if you put an existing engine sideways is you have to redesign the lubrication, as the oil sump at the bottom now needs a different orientation. The few GWR railcars will have benefitted from the research put into this for buses.
The Southern Region going instead for a big single engine with electric drive has been given various reasons, but I think the principal one is underfloor engines, accessed from ground level, are incompatible with 3rd rail installations.
The overall concept of "multiple unit" is not particularly about engines and where they are situated, or even controls within a fixed unit, but about being able to couple up two or more together and control them all from the front. The challenges here, with even setting which direction the vehicles are to go, when they may have been coupled up approaching from either direction to either end of the formation are readily apparent. Long established for electric stock, having mechanical gearboxes and keeping them all 'singing from the same hymnsheet' was a further issue. Apparently when the first pioneer Class 20 diesel locos were coupled together at the works, they set off (or tried to) in opposite directions! The BR dmu arrangements were principally devised by the Walker Brothers company, of Wigan, building on what the GWR had got them to do with their first 3-car diesel unit, the last of their AEC streamlined cars built, power cars at each end with a regular carriage in the middle. This gave the 'Yellow Diamond' connections, and the various improvements needed on this, such as engine starting issues when in multiple, became the 'Blue Square' standard.
The Northern Ireland Railway had some dmus with larger engines and automatic gearboxes, where each engine in a multiple formation made its own changes, which on a steep gradient could lead to some cars changing down at different moments to others, with shocks being felt up and down the train as they did so.
Any who have experienced the 1930s-era semi-streamlined railcars, often French bus builder (like Renault) design, that were common on French/Spanish/Italian etc narrow gauge lines for several decades, with the engine up inside the bodywork, considerable noise back at the seats and somehow not entirely fume-free, will know the poor features of doing it this way.
