Why are piston engines for aircraft rarely diesel powered?
You are right, there are few modern aerodiesels around - so few in fact that we can go through the brief list one by one:


Thielert: This is a development based on Mercedes-Benz car diesels, of which more than 1500 1.7 liter engines were built. Currently, a 2.0 liter engine is offered. The original Thielert company went bankrupt in 2008 and has been taken over by Continental.
Austro-Engine, another conversion of a car diesel for aircraft use. It is the result of the disappointment of Thielert's main customer, Diamond Aircraft, with the record of Thielert's initial Centurion 1.7 engine.
SMA:, a French turbocharged diesel with 5 liters displacement. Currently, around 100 of them have been delivered after almost 20 years of development work.
Zoche: The product of a father-son team with many clever details, but a quarter century of development work has not yet resulted in an airworthiness certificate for their two-stroke radial diesels. While Zoche claims to be the victim of a conspiracy by the authorities, the accused complain that the engines could not keep their cylinder heads on for long enough.


What has held the diesels back for so long?


Cost: Development in aviation piston engines has effectively stopped with the jet age. The existing designs were simply good enough until fuel prices went through the roof. This made diesels only attractive in niches, and as a consequence, production runs were far too small to justify the major development effort. Aviation engines run constantly at around 70% of their full power, so regular car engines could not be used without heavy modifications. As a consequence, a conversion kit can cost you $89,000!
Weight and complexity: The higher compression ratio of 1:30 requires a heavier structure, and fuel injection, a gearbox and turbocharging push the part count well above that of a gasoline engine. Once you compare system mass (fuel plus engine), the diesel wins only at ranges which are now mostly flown by jets. Yes, fuel flow is less (10 gallons per hour for a diesel against 13.5 gallons per hour for a comparable gasoline engine), but will only help at ranges above a couple of hundred miles.
Vibration! With that compression ratio, every ignition causes a three or four times heavier jolt to the engine and the aircraft structure. Not only the engine, but the whole aircraft structure needs to be designed with that in mind.


To be fair, a modern gasoline engine will also benefit from fuel injection, a gearbox and turbocharging, and Zoche initially did not use an electric system, relying instead on pressurized air for starting the engine (a pressure bottle loses much less of its stored energy when cooled to -20° than a battery, after all), but the practical aerodiesels are a lot more complex than the engines they are meant to replace, creating an obvious reliability disadvantage.



Thielert Centurion 1.7 in a Diamond Twin Star (picture source)