Hello Clive,
Without doubt the best combination for a home built engine is a liner made from free cutting EN1a mild steel with a cast iron piston.
Lap the liner then lap the piston to fit. I have made several diesels using this combination with good success all with good compression and all run well.
There really is no need to use material that requires heat treatment – that will inevitably lead to distortion anyway.
Making a diesel is a satisfying project especially when it runs but the smaller the capacity is the more difficult to get that fit required between piston and liner for successful running. Not impossible obviously as many have been made but easier if it's larger. If you haven't got the right fit for decent compression it's unlikely to start let alone run as also many have found out.
If you haven't started yet may I suggest you start with something around 2 – 2.5cc.
The Owen 'Mate' and Chris Boll's 'Holly' spring to mind as ideal candidates.
If it's of any use I have described the building of mine on Model Engine Maker
Good luck with your project
Regards – Tug