I read about the bike in the link below in "Streetbike" years ago and just stumbled on the link by chance. Most of the info is in the link but from memory the engine was about 5 litres and apparently the engine did run/explode...
http://www2.hunterlink.net.au/~ddped/rrv2.htm
Shame a Merlin V-12 had to die for it (what does one sixth of a Merlin sound like?) but a pretty hard case idea. I can also remember seeing a Merlin powered car on Top Gear once - apparently the owner got sued by Rolls-Royce for putting their badge on the front of it.
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