I think all the stirling engine (for car applications) needs is more research, and general knowledge of how it works so it would be more attractive to investors and the public. The MOD I and MOD II projects only had a couple of years to be developed before funding was cut, so of course they're not going to be perfect machines. I'm certain if we hadn't added the improvements (radiator, torque converter, etc) to the modern ICE it wouldn't be used as efficient as it is (you call 33% efficient..heh!). The ICE engine had roughly 100 years to be tweaked and developed. I believe the main issue is, the stirling isn't mainstream or understood enough by the public, sorta similar to hybrids.
Its no secret that the stirling is more efficient (with a decent temp. differential) than a standard ICE. I hope to see these in generator applications soon.