From Wikipedia Rover V8 engine
In the late 1970s, British Leyland became aware of the increasing importance of diesel engined cars to the British, European and (especially) North American markets in the wake of the 1979 energy crisis. It was decided that a new series of diesel engines powerful, refined and economical enough for use in BL cars was needed. However, with development funding tight, it was necessary to use existing BL petrol engines as a base. This included a diesel version of the 3.5-litre V8, the development project for which was code-named 'Iceberg'.
BL collaborated with Perkins Engines of Peterborough to develop the engine. Both naturally aspirated and turbocharged versions were produced, both using a Stanadyne rotary mechanical fuel injection system. Power outputs of around 100 (naturally aspirated) and 150 (turbocharged) horsepower were achieved.
The Iceberg engine was slated for fitment in the Range Rover, Rover SD1 and the Jaguar XJ but the project encountered problems with failure of the alloy cylinder heads and internal cooling. They were limited by the need to use the same basic block casting as the petrol engine to allow the Iceberg engine to be produced on the same production line to reduce costs. Whilst these problems could have been overcome, the project ran into financial and logistical problems caused by the reorganisation of BL and specifically the splitting of Land Rover and Rover into separate divisions.
Land Rover took over production of the V8 engine in 1982, moving it from the main BL engine plant at Acock's Green into a new, much lower-capacity production line in the Solihull works, where it was built alongside the other Land Rover engines. This meant that there was no spare capacity to build diesel versions of the engine. Coupled to this, it was clear that the market for large diesel engined cars in North America had not developed as expected.
BL finally pulled out of the project in 1983. Perkins initially decided to pursue the project alone, and even produced advertising brochures for the engine as an industrial power unit, but BL withdrew all technical support and Project Iceberg was wrapped up in late 1983. BL's other collaboration with Perkins (producing a diesel version of the O-Series engine) produced the highly successful 'Prima' unit. BL (and its Rover Group successor) bought in 2.5-litre 4-cylinder turbodiesel units from VM Motori to use in the SD1 and Range Rover.
Well, in the case of the V8, certainly not 8/9ths underwater, because the engine looks huge from the top, and quite tiny from below!
Perhaps, like all good diesels, it was inherently slow to warm up... Or, maybe a sly reference to BL/Rover management?