Got a few Vids on my YT channel for making burners and also modifying gas water heaters.
https://www.youtube.com/channel/UCEfdKGemqGDvpn2hSuJl2Nw?view_as=publicI did just as you said, took out the gas burner and put in a self made oil burner. Very easy and you can knock up a burner in less than an hour... if that. The trick is control. Recently I have been playing with different pumps from fleabay for that along with PWM controllers for the blower and the oil feed pump. I'm liking pumps because unlike gravity feed, the supply is constant and does not change with tank level, oil warming up or cooling off etc. You set the output and that's it.
For your application you could incorporate some temp sensors and use a Dump load. Put a thermostat on the return water and if it hits a certain temp, a fan comes on for a radiator and just dumps the the heat or maybe heats another area like a garage where the washing is or could even go to a thermal mass like another tank to store the heat so the burner can be switched off but the water circulated and supply heat.
You have to be a bit creative with this and work out what you want and also work to your skills and abilities. A lot of people want turnkey solutions but that costs a bomb as you have seen. To get the benefit of cost you have to invest your time and effort. I'm looking at using arduino micro controllers for regulation but I have a lot to learn about them yet. A dump load may not be the most efficient way to go but it may be simple and allow you to heat with oil where a more sophisticated system would be out of your grasp.
I'm setting up a spa heater for home heating. Again just removed the gas burner and replaced it with an oil burner.
For the time being I'll open the window if it gets too warm inside. Should be nice to have the window open in winter and fresh air going through. :0)
I'm going to use a caravan type water pump and probably stage the thing so it's idle or heat. I'm thinking one PWM controller running constantly for idle and another on a thermostat for heating when the temp drops. When it hits preset, the thing will drop back. I'll have the thermostat on a relay so it just supplies the higher voltage over the top of the other PWM controller. I'll have to tune the air supply a bit and probably use a 12V Bilge blower so I can control both the air and fuel together. Other alternative may be something like a car throttle body on a solenoid with a hole in the thing so it supplies air when the thing is it idle and then opens to admit the full/ tuned airflow when heat is required.
I'm also looking for a 400L hot water system to use as an extra tank. I am in 2 minds about this. I may set up as a solar powered pre heater that feeds into the main tank therefore reducing the off peak power requirement or heating up fully and eliminating it. Other option is to have an oil fired heater. I'll set that up on a simple shutdown where I fire the thing up and then one of 2 thermostats running in series hit temp the thing simply cuts the oil supply then a few minutes later the fan. I'll use 2 thermos so they both have to be closed for the thing to run. If one fails the other will sense temp and shut down. May even use a 3rd as a master cutout on a non latching relay. Even if everything failed, the worst that can happen is the heaters expansion valve will blow off and the incoming water will cool everything down till it cycles again.
I may even go for both options being a summer and winter alternative. Summer should give loads of solar powered hot water and winter would be the oil fired.
One thing I'd make you aware of is your oil supply. Do you have one and is it big enough to meet your needs?
IF you burn 2L of oil an hour which would be pretty much a minimum for what I believe you'll need where you are even 12 hours a day that's 24L. x7 plus a bit extra for rounding is 150L a week MINIMUM. I'd be wanting a supply of 200L a week myself. You can store it, you'd probably want 3-4000L per winter so have you the Supply per week/ month or the space for at least 3 IBC's? The rest you might be able to make up over the winter however be aware that a lot less people go out in winter so if you want to use veg oil, the restaurants don't produce as nearly as much in winter as they do summer. In Sydney, it's way less oil.
I favor Veg oil and if tht is your choice, would recommend you process in summer although you'll have to watch the fats in winter. You may need to add some Diesel/ turps/ kero to help keep it thin depending on the temp and the oil you get. You'll want to strain it at least through some fabric to get out the crumb size particles and dead rodents etc. Dosen't have to be super clean like engine fuel but it has to have anything that can build up and cause blockages removed.
The best way to deal with oil is do nothing. Put it in a drum or IBC and the longer you do nothing with it the less you'll have to do to it when you do want to use it. Gravity will take 95% of the crap to the bottom of the container, you pump off and strain the rest into your Clean tank and you are ready to go. If you have the space and supply I'd say be stocking up as early in spring as you can for the winter ahead. I try to do that with the oil I run my Vehicle on and I can usualy get enough put away so I don't have to do any collection or filtering in the cold months and just run off reserves. When things warm up and the oil is plentiful again I stock up.
You can use engine oil but again, you'll probably want to strain that as well. I used some the other day that came from my Brother in laws Battle ship of a cruiser. It was taken straight from the engines into a clean tin. it sat for a year and when I went to use it there was thick sludge like gloop on the bottom. The stuff seems to congeal somewhat no matter how clean and sealed it is and this would cause problems. You'd at least want to have settling tanks and pump from the top down to get the good liquid from the thick sump gunk.
If you haven't sourced your fuel, I'd implore you to do that before going any further. Some people like myself can get more oil than they can use, others say they can't get any. In reality I think more depends more on the person than the location. Some people are afraid to ask and have all sorts of weird and wonderful ideas on things and others like myself have plenty of front and are not afraid to approach people or take whats sitting around largely being a nuisance.
There are a lot of different ways to design and control a heater so get an idea of the physical dimensions and output of what you need and an idea of how you are going to set it up. As a rule of thumb, 1 L of oil is good for 10 KW of heat output. you can look at your gas heater and get an idea of what it's doing, ( may have to use an online converter to change BTU or Joules into KW or whatever you want to work with) and then you'll know the size of the system you are wanting to do and have an idea of fuel flows, consumption and air/ blower requirements.
From there you can build the thing with an idea of size and control.
You will NOT get away with some simple drip feed unless you don't mind attending to the thing every 30 min. I'd strongly recommend a pumped system because it's the most consistent and reliable.