Noman, Brother I don’t have much information on engines but have had a Surf and a Prado with 1KZ, can only tell that its a powerful and high speed engine, fuel average within Lahore was 6-7 and out of town was 9-10, however I am not sure whether 1KZ, which has come with mid sized SUV's, is enough to power the large mass of BJ60.
One of my friends Mujahid Zafar, picture of his BJ is attached has a 4000 cc Diesel engine in his vehicle, as you can see it has the tires of H1 Hummer. I have had couple of opportunities of traveling with him to north and can tell with absolute surety that this BJ was a blast in every difficult off road condition. He was to be caught with a little bit of rally style driving otherwise I, on my Defender would not be able to follow.
Don’t know which engine the BJ of my friend has, but on refueling stops, his vehicle had almost the same quantity of fuel that TLC’s with 1HD or 1HDT had.
In case you need any further information on engine or body setup of Mujahid Sb’s BJ, his number is 0300-845-5563