The following quote that follows gives some indication of the chaotic management thinking in the Leyland Group at the time the AEC V8 was being designed. The requirements of the military are in mant respects completely different to civilian haulage operation. The Military being interested in power above all other considerations. Longevity for a power unit which could be in equipment destroyed by the enemy tomorrow was of comparatively little importance.
Many years later Bob Friars, AEC’s chief power unit engineer at the time, was to write: “We never really knew what the engine was being developed for, or why. It was generally assumed that it was to be a military unit, but we didn’t know. Group engineering management produced an outline spec for a compact power unit capable of up to 300bhp, and shortly afterwards there was an activating memo. That was it. We didn’t know if it were for industrial, marine, automotive or any other application, let alone what its duty cycles were to be.”
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I would say that rather than trying to blame AEC and one particular inline engine and its dimensions, the responsibility for a lack of a suitable engine to take into the future should be laid firmly with Leyland engineering management. For: allowing the confusion created by trying to create a ‘Metric engine’, downsizing it, abandoning the Albion/ Leyland 0 900, allowing the metric 500 engine and the AV 800 to go into production before either was ready, abandoning the Leyland 0 690, but most of all for giving up and totally failing to realise what could be done with their own 0 680 only to have one of their competitors wipe the floor with them using the same basic structure.
Both the AEC and Leyland worked in the late 1920s on trying to develop a reliable diesel engine from their own almost identical petrol engines. Identical because they has been designed by the same man. Of the two companies the AEC, in conjunction with and at the instigation of the chief engineers of their major customer, explored more potential solutions. The resultant post WW2 products were very evenly matched. They each had their own and their shared failings . When it came to having to rectify those faults it was a quicker and simpler task to attend to the AEC product.
To put it into context the AV760 was introduced around 1964/5 alongside the AV691 as its more powerful stablemate, this at the change over point from wet liner to dry liner engine production, Automotive sales of the larger engine concentrated on its mid rated version. The questions needing to be asked about development at that time are: “Who in the period that these two engines were being developed, were AEC’s competitors and what was the target market?” ERF had introduced the 11 litre ■■■■■■■ 180 powered KV in 1961. This engine was roughly the equivalent of their own now superseded maximum-rated wet liner AV690 or the lowest rated 691. Other than that the main competitor was Gardner who they could easily outrun, or if staying in the new Leyland group the Power Plus 680. The AEC had virtually seen off Albion, Bristol, Crossley, Daimler, Dennis, Meadows, and Thorneycroft, none of whom had a reliable product of comparable size and output. For non automotive use the AV 1100 offered outputs far in excess of what was even dreamed of for vehicles. The market was mainly the very large UK haulier and the bus company sectors who wanted an engine with more lively performance than the plodding Gardner, occupied less space and which got somewhere near its physical weight.
because they’d settle at least some of the reasons as to what went wrong,at least in the case of the Truck division’s fortunes. 
