I'm also thinking about running the engine on producer gas from a gassifier
Interesting, you are right up my alley. I was seriously considering doing a gasifier project myself.
Well, firstly, I can tell you right off the bat that syngas is NOT very energy dense. Especially if you are feeding the gasifier with just plain air and not pure oxygen. With air (some oxygen diluted with lots of nitrogen) the product has about 1/3th the energy of natural gas. Also, know that gasifiers are notoriously bad at being able to throttle up and down, this is why they work good for generators, where they are expected to operate relativity constantly. With all this in mind, the size of the gasifier you're going to need to run a several dozen horsepower auto engine close to it's peek efficiency/power constantly is going to be prodigious. 55 Gallon drums won't cut it, you will need industrial sized containers (Think small grain silos). It will likely be a very large project, and consume all of the wood/biomass.
But do you really need that much power...?
You should consider that the average 30-80 HP small auto engine will produce 22 to 60 Kilowatts of electrical power! But the average household uses only about 9 Kilowatts, the average person only really uses about 1-3 Kilowatts of power on a casual day-to-day basis, depending on the person of course. If you're welding, using an electric clothes dryer, an electric oven, electric heaters, leaving all your lights on constantly, et cetera, et cetera, then you may use quite a bit more. However, consider that there are alternatives for most of this stuff, and you only use most of those things for limited times anyway. Finally consider that when you sleep, you would normally turn all your appliances off, accept for maybe your water heater and a few odds and ends. In any case, the average single person really only uses 1-3 Kilowatts.
Here's the thing, you can get upwards of 7,456 watts off of just a 10 HP genset engine... a whole lot of electricity for not a lot of engine honestly.
The real problem is not the constant power, it's the peek power usage. With all of the above on at one time things could get up into the tens of Kilowatts range. The best way to deal with this though, is not by making a larger and larger genset, but rather making some kind of energy storage system. You do this because over time, a small genset produces more than enough power for ones needs, but can't make the peek power when required. And a large generator that can handle the peek load, will operate very poorly at the typical load of daily use, and will not be able to respond quickly to a sudden demand for more power.
An energy storage system solves this dilemma. It works because when demand is low, your storage system is charging up over time. But when demand suddenly becomes high, the storage system
and your generator will discharge into the load at the same time. A good storage systems can dump significantly more power than your generator can, so long as it's only for short duration's. All in all, this method is effectively tripling, quadrupling, or even farther increasing your systems peek power, with the added benefit of being able to respond immediately when the power is needed.
So you should consider if you really need to go and use a full auto engine.
Alternatives?
Something I was considering is a sterling engine to convert biomass into electricity. So long as you can get all of the heat of the biomass to go through the thing, the sterling engine is really energy efficient at converting heat into electricity. You also have the added benefit of not needing to mess with an alien solid-to-gas conversion apparatus, where the product is a highly toxic and flammable gas. One only needs to build something resembling a wood burning stove to use a sterling engine. Unfortunately, the sterling engine is just as alien, if not more so than a biomass gasifier. And they also have strict tolerances that make precision machining a fair necessity. This makes a sterling engine genset a fairly hard project. If you could find someone that had or had access to a good CNC machine, and took every opportunity to use auto parts where you could, this IMO is a better system for making power than a biomass gasifier.
Err... back on topic now...
Sensing RPM off the coil is a good, proven to work method. It's more or less contact free, contaminant proof, and would most likely directly give you the actual RPM, which makes some other things simpler. The only problem is, if you're not careful, you could end up sending 30~40KV into your PIC. And we really can't know what it will tell your engine to do when that happens. Hopefully "Shut down".
If you use this method, you are obviously going to need to HV harden the coils sensor. But it might also be a good idea to put in a HV hardened watchdog circuit that will kill the engine if the PIC stops sending it a fairly specific signal. This will insure the engine comes to a halt if the defenseless little PIC happens to get zapped. CMOS chips don't like HV at all, and you can't rely on one to come to a safe state when exposed to such things.