You forget the necessary heat loss. Develope a lubricant that will withstand 400 deg F and you can greatly increase efficiency.
Have you considered variable valve timing and radical cam design in conjunction with high compression?
Actually, just the opposite is the way it works. A highly efficient engine of any process tends to be very large for its power output.
The diesel engine outshines the gasoline (spark-ignited) engine every time in efficiency because of its higher compression ratio. However, it will weigh over twice as much as an equally powered SI engine.