As no one has responded yet here is a first pass set of thoughts.
1/ Can I assume by Class 52 the Western Warship? If so this is actually a diesel hydraulic not a diesel electric…. Just a wee starter there.
2/ As a regular inhabitant of the ” Rabbit hole of spiralling complexity ” the thought of modern traction in 3 1/2″ gage fills me with dread to build a potentially very complex locomotive in such a small scale. Not impossible, but ‘potentially’ very difficult. I think 5″ is usually the starting point for this.
3/ The type of power system needs VERY careful thought and there are a range of options. These are….
a) Pure electric drive with batteries, controller and traction motors. Then usually a sound system to make it sound realistic.
b) An internal combustion engine – In the case of the Class 52 Warship coupled to a fluid torque converter driving the bogies through a reduction gearbox and Carden – shafts. Definitely the next stage up. The issue is the prime mover here, a commercially built unit, for this scale very small and possibly not robust enough for rail service. OR build your own, next level up again…. Thus depends on ones skill level…
So, designs available that I know about.
3 1/2″ Gauge 0-6-0 names “1831” by Edgar Westbury utilising a 2 cylinder IC engine.
5″ Gauge Hymec by Roy Amesbury – was described in ME commencing volume 160 no. 3827 – June 1988 – A v8 petrol with hydraulic transmission, so prototypical arrangement but not to scale internally. He went a fair bit down the rabbit hole but not too far that he met the white rabbit…..
Then there is a 52 in 5″ gauge – I think there may be more than one – but this one from Phoenix is typical of the ‘basic’ battery powered Diesel outline models.
https://phoenixlocos.com/products/model-locos/class-52-western/
Usual disclaimer, I have no connection or knowledge on the particular model.
In modern traction land it is ‘relatively’ easy to build an electric powered outline model. The minute one tries to cross into the more scale realm the complexity goes up by the exponential function the further into the rabbit hole one goes.
I did some thought concepts for a 7 1/4″ Ukranian M62 and it was scary how quickly the complexity escalated, I ran back out that rabbit hole very quickly.
I did a small 5″ ‘electric’ diesel many years ago ( Brush Bear Peacock D2999 ) and it was reasonably OK but NOT I.C.
If I was doing this in the future I would probably only look at pure electric traction and avoid Diesel…..
But it depends on your goal and level of skill.
Hope that minor ramble assists…..
Best regards.