diesel engine working on the same principle as the of you have describe these engines where made by fairbanks-morse in the 40's and 50'
they where used in marine and electric power station application
these fairbanks had reed valve like gas 2 stroke engine, transfer and exhaust ports
but they had some draw backs like exhaust port fouling with carbon deposite witch had to be removed on a regular basses to restore engine performance and they had a wet crankcase with oil in it so it was not a good idea to run them too fast or it might go out of control using its own engine oil as fuel ( the mechanical governer was set around a no load max speed of 400 rpm to be safe for a fairbanks-morse 6 cyl 240 hp model:35D10 and it weight
17 tons with all accessory

)