Ive always wondered about this. Propane has 104 octane, so you could run 11/12:1 compression. Its cold, so your mixture would be nice and cool. If you could get it injected close to the valve, the propane wouldnt dissipate/dissolve very much, and you could potentially make some good power respectively. I just bought a bronco for $100 and the engine is hooped, and my brother in law is taking the tranny. So in short I have a project vehicle I plan on putting a 300 I6 in, on propane.

 

There are a couple of problems with propane.
It produces less BTU's than petrol - this can be overcome by increasing the CR.
Engines that run it here appear more likely to over heat.

 

When I was 16 I had an '80 Bronco with a 351w auto on propane. My dad had an 85 f250 I6 on propane, neither had trouble with over heating. Just stick in a cooler running thermostat, they dont run THAT much hotter than a gas engine. There are 2 major factors in why your engine looses power on propane #1 being the fact that you loose a large percentage of propane due to the heat evaporating it into gas form, not a liquid. #2 being the compression ratio of your gasoline engine is way to low for the propane to properly combust with enough power.

 

Liquid propane injection is a great idea but it's just not a DIY project. You might want to read an Eng-Tips thread on liquid injection and a Fuels Forum thread on liquid injection. Most commercially available propane injection systems available in North America are vapor injection systems and, as such, work somewhat similarly to propane carburetors but with much better performance, especially on fuel-injected gasoline engines.

If you really want to do propane injection, I would try a MegaSquirt-based system injecting propane vapor. The ECU is relatively cheap because you build it yourself and vapor injectors are commercially available. You could probably do a dual fuel system that is efficient on both fuels since the MegaSquirt controller appears to have mapping capability for two fuels. It also has a large support forum.

Propane engines do not run hotter than gasoline engines. Since the fuel is metered into the engine as a dry gas on carbureted engines, cooler thermostats were often used to slightly improve the power output of these engines. A hot running propane engine could possibly result from a fuel mixture that is way too rich. Rich gaseous fuel mixtures burn hotter and slower than lean mixtures, which could result in burned exhaust valves in extreme cases.

Propane engines do not lose power from the fuel's lower BTU content per gallon. (Actually, propane has a higher BTU content per pound than gasoline.) Because propane is supplied to the engine as a dry gas, it displaces some of the air that could theoretically fill the cylinders. Gasoline is metered as an atomized liquid which displaces much less air. The key to maximizing the horsepower in any engine is to maximize the amount of air that it can injest.

Propane also has an octane rating of 104. You don't lose power from having a low compression ratio but rather the engine is not as efficient as it could potentially be. A safe CR for propane is around 10.5-11:1 although people have successfully run CRs of 12.5:1. However, CRs over 11:1 leave little margin for error.

If you have a suitable engine and fuel is available and cheap enough, a propane conversion could be a good project.