Hi mate,
I agree it is a bit hit and miss, i work with an engineer, and do allot of welding with him. When i asked him if he could make me a chipper after 30 years of engineering he refused, saying it was way to risky.
But if you really want to i would recommend looking at the deutscher model 650 parts breakdown (
http://www.deutschermowers.com.au/owner%20and%20part%20manuals/Chipper%20Manual%20v1.pdf). I have one and it will chip up to 70mm branches, and turn horse poo to dust with its 6.5 ohv Briggs.
as to engine i would think about mabe a decent briggs (12 + hp) mabe even a twin.
Good luck and stay safe
Regards jay