Dirtman,
Yes find someone else, for some reason he doesn't want to mess with it. (the R&R on a new motor is a better profit margin for him than diagnostics?) But you don't have to go to a dealer, unless it is a warranty problem. The isuzu diesel is not rare ( I think they are the single largest diesel manufacturer...). Not sure how close to the coast you are, but a lot of boats use the small isuzu. You may want to stop by a couple larger truck shops and ask. You are not having any troubles (that you know of) with the hydraulics or the skid steer specific stuff. You are having trouble with the diesel engine. A good farm tractor mechanic should be able to help you also. Stop by one of the larger foresters and see what mechanic they use. You should not have to go too far. With my Isuzu, we found that it was just a couple bad glow plugs causing the starting problem. We lose power after about a half hour of work, but I think it is a fuel flow problem.. and we have not cleaned the tanks, lines etc. like we should. The little skid steer it is in, the hour meter broke with a kabillion hours on it, years ago and I don't suspect the engine of having real problems.
Good luck! Have a good weekend!