Your idea is fascinating, Harden. I love this kind of original thinking and reach-for-the-sky vision, especially when it relies on the Contour powertrain, known by all of us as one of the best ever conceived.

Actually, your story reminded me of the lake in Upper Canada that my family used to visit when I was a kid. There was an old mechanic geezer who used a WWII jeep for power generation on his farm. There were several cottages that tapped off the farm supply, including ours. He used it mostly for irrigation and septic handling. Unfortunately I was too young to recall his exact setup, but I remember the lights dimming frequently in the cottage. Ha ha. Strangly enough, I've always been a tinkerer, and it's possible that I've drawn subliminal inspiration from this guy's jeep setup back in the 50's.

Regarding your specific setup, I think you are on the right track. Heat management is critical for a hot-tub application, so I agree with your concerns. Thermodynamics need not be a roadblock in this case. Some thoughts come to mind.

(1) you should try to extract all the heat from the engine and either plumb it back in ahead of the combustion process or direct it to the hot tub itself. You could use a air-oil intercooler (I once fashioned one myself out of an old room air conditioner) to extract combustion heat out of the exhaust and feed it back into the engine oil. Be careful there to maintain at least 20gpm on your oil pump for adequate flow level, and I would only use a high-grade synthetic or super high mileage Class 8 truck oil to prevent any sludge development in case there is any microfluid transfer within the intercooler.

(2) Second, I would recommend that you augment the alternater drag load as suggested earlier in the thread. Your PTO setup is good, but sounds too variable in it's power consumtion. Though it's possible that a free revving engine will self regulate to a consistent temperature, startup gradients can be a problem when the demand picks back up. Have you thought about setting up a slave-drive double alternator config? Might work for the transient power/voltage spikes from your shop. The other idea might be a wet-brake alternator. They're a bit pricey of course, and not readily available at Autozone, but I have been working on the final design of a do-it-yourself kit that utilizes household 3-phase electric motors, like those found in fans or large microwave ovens, in a custom machined aluminum case filled with ordinary glycol. Yes, I know... pitting is often a concern for glycol-class fluids with aluminum, but I found a coating of ordinary spray paint on the fluid passages usually provides adequate pitting control. I've had good success in bench tests using flat grey Krylon, which also adds a nice titanium look that's so popular these days. A zinc casting might be better for overall microstructure behavior, but the casting shop that does my work is reluctant to deal w/ more exotic zinc material. You can contact me directly at bud_miller_01@yahoo.com and I'll send you details. I think this is a perfect application, Harden.

(3) My final comment is so simple I can't believe nobody else mentioned it. Why don't you just take advantage of secondary heat effects by bubbling the exhaust around the perimeter of the hot tub? Of course you have to keep it away from where you are breathing. I'm thinking you could fashion an annular diffuser with a normal bathroom fan air handler to extract the CO. Might be an ideal way boost engine-to-water heat transfer while also muffling the engine. No flames guys! You've got to extract the fumes, and you'll be fine.

Don't mess around with engine management. I don't know about you, but I don't have an electronical PhD, so it's usually a dead end to dig into that kind of crap! I just stick to my main areas of expertise: thermodyamics, metallurgy, plumbing.
Feel free to email me w/ comments or questions. Again, great topic!

Regards,
Bud Miller