Actually, it was bored out a bit--sort of, but not really by Kaiser.
There was a slightly larger engine I seem to recall that ended up in a one-off, and wasn't there a picture of it in "The Last Onslaught on Detroit"? I've lent my copy so can't check, something like 244 or 248 cid and some other modifications, so that it was in the range of 130-140 hp?? Like the supercharged 54-55 engine without the supercharger. Which begs the question--what would have THAT engine put out with a supercharger? Perhaps enough to keep them competitive a year or maybe two longer but again, not worth the expense if there was no game changing V8
Mind you, Massey/Massey-Ferguson used Continental engines, 4 and 6 cyl, in their tractors, and I was offered a good strong near new engine from a friend, and it was either 248 or 244 cid--whatever the size, I think it was the other size from the Kaiser one-off--although it might have been where the Kaiser engineers got their basic block or idea. I eventually determined it wouldn't work in the 49 even though it looked identical, because the crank end was quite different. Shame, because with a Kaiser head and a better carb than my Special, it would have had more than 100 hp. There wasn't a problem with overheating with this engine, but then again, it all depended how they were used. The problems with the Continental design became quite apparent if used as a car engine and run above 3500 rpm--I'm guessing here at the RPM, but somewhere above 3000 under load it would run hot. Used in tractors and stationary engines with perhaps some sort of governor on the rpm, or run at their optimum speed which I think was somewhere like 2800 RPM, they lasted very well.
About the pump price, the spread in the early 50s works out to nearly 20%! Americans are (very foolishly IMHO) staying away from diesels today with a percentage spread in the US around half that. Due to a different taxation model in Canada--we don't have those extra 'punitive' taxes on diesel like the US has, and we don't have the strange monomaniacal fixation on ethanol to the extent the US has either, regular and diesel are usually close, sometimes the same, or diesel somewhat higher in the cooler months (ie heating oil demand), but the difference is usually no more than about 4% either way, with premium almost aways a bit higher than diesel. Maybe 6% more than regular gasoline. Today's prices for reg-mid-prem-diesel are 121.7-125.4-128.9-126.5 per litre for example, and that is right on the mark.
I can understand why premium was such a hard sell in the early 50s--that was a huge extra cost for a perceived lesser gain, when all you had to do was "get a V8". "An 8 would be stronger than a 6" which wasn't always the case, which is why even when incorrect, Ford sold so many flathead 8s that had less hp than many competitor's 6 cylinders, but perception is all. Recently, we have begun realising that a V6 can be better than a V8 (Ford F150 sales) that a 4 might be better than a V6 (Buick etc) and that a 3 might be better than a 4, (nothing here yet, but amply proved by VW, Ford etc in Europe and elsewhere)at doing what it is supposed to do--under the right conditions