I can't answer the ethanol question for you, but I can speak to the deisel vs. gas issue a little.
I have owned a few deisel compact utility tractors in the 21-26 HP range, and one in the 40 HP range(4110,4115,4500 JD's. I still own the 4115), and all of them would/will out torque my comparable gas tractors equipped with identical mowers. (my 4110(21.6 HP) compared to my 445 (22HP) for one example). Not even close. The deisel wins by a noticable margin in thick or weedy grass.
I have never run a deisel ZTR, but I seriously doubt that having a gas engine on a ZTR could somehow make the gas engine superior all of a sudden. My ZTR has a gas engine, but if I had the funds to buy whatever I felt like, I'd buy a deisel without question. They're more fuel efficient too.
Both Deere and Kubota tout their deisels as the way to go for seriously heavy cutting.