Air cooled anything, diesel/2 stroke motorbike engines all are noisy, the cooling fins act as resonators. Water jackets insulate most noises, so yes, you are right.
People who own these old engines seem to go one of two ways, they either think its worth millions cause its old and theirs is probably the only one left in the universe , or because its old and rusty, its maybe worth something as scrap, or parts.
The real value generally lays somewhere in between.
I know how astonished I was when I found these forums on the internet, as i never knew how popular and widespread these antiques were, and being still used every day, for 30 odd years i thought i was the only one....
For what its worth, recently have played with a Nissan TD27 4 cylinder Terano engine. .... 1996ish.
These are old school engineering and quite happily burn old engine oil as fuel, so its not just a Lister thing.
They arent as clean burning, unsure what the combustion chamber design is in those engines either, just thought to try it.
These and similar engines are very cheap to buy, and are possibly a realistic and economic alternative where function takes precedence over old. Using these would certainly cure light flicker.......
Point of note, the oil pump outlet is passed through a labyrinth through the water jacket integral with the block, an integrated oil cooler.... thought that was very clever.
If my antiques die before I do, this "modern" engine will be the way I will go.