N-scale diesel mechanisms can be used in Sn2, however, the wheels will be a bit under-sized as far as diameter and tread width are concerned.
HO-scale diesel mechanisms with 24" wheels (scales to just under 18" in S-scale) are another option.
NorthWest ShortLine's older Flea models are also usable, although they tend to be noisy. Modelers have used the newer Flea II by converting the gearing mechanism to a belt-pulley system, which is a lot quieter. One source for those parts is Nigel Lawton 009. Recommended parts are the 10mm-diameter belts, a 1.7mm root pulley for the motor shaft, and a 7 or 8mm root pulley for the worm shaft. Roughing up the pulleys a bit yields a better grip by the belt. The belt does need to be run from time to time, to avoid it becoming set to its shape, and the belt will eventually wear out and need to be replaced.