There is no way he can get 80mpg AND 400 Horsepower
Maybe with a small steam turbine attached to the drive shaft and a steam generator attached to the exhaust manifold.
There’s a simpler way to achieve a similar goal.
Water injection.
If you run an engine hard and at higher temps, then inject water along with the fuel, the water flashes to steam and adds additional chamber pressure to drive the piston down. Also, the water-to-steam process absorbs heat, lowers engine temps, and reduces waste energy lost to the cooling system and out the tailpipe. Reducing heat also allows you to run higher compression ratios without risk of detonation.
Drag racers used to use this trick.
http://en.wikipedia.org/wiki/Water_injection_%28engines%29
The six stroke diesel cycle takes this concept to another level.
http://en.wikipedia.org/wiki/Crower_six_stroke