I have found that the flame heaters work poorly on turbo engines. The intake manifold adapter is much narrower than the one on the naturally aspirated ones. The increased speed of the air snuffs out the flame (made a monitoring device for this). The spark plug actually generates a continues series of sparks from a vibrator, but is still to weak to keep the fuel ignited. Cold diesel fuel is difficult to ignite.
You are right about the air being used up in the process, but at low rpm there is lots more available than needed for combustion.
About cold starting, with a good set of batteries and a fast cranking engine it will start without any starting aids down to about 0 to 10 degrees F.
The fuel density compensator compares the specific gravity of the fuel to diesel and increases the amount of fuel if a less dense fuel is detected. All it does is keeps the power output of the engine constant for a given position of the "gas" pedal. By-passing it provides a little more fuel to the engine for the same given position of the gas pedal. You can still burn other fuels, but the performnce of the engine will suffer some.
I rather keep the compensator in the circuit, if more fuel delivery is desired, the governor can be adjusted.
All diesel engines can burn a multitude of fuels, from cooking oil to kerosene, but the deuce engine has a specially designed piston ( a cavity in the top) that helps atomize the fuels better. I think this is where the license from MAN in Germany comes in.
I have used biodiesel and cooking oil in my truck ranging from 10 to 90% and has found that the engine runs very well on any of it, but diesel does give it a little more boost. Put over one thousand miles on it since April of this year with biodiesel, cooking oil and petro diesel in various combinations.
BTW, the biodiesel is home made and may contain some methanol too.
I'm aware that these subjects have been covered before in many places on this forum, but they also get buried easily. I apologize to you guys who may be getting annoyed by reading the same stuff over and over.