Hi picclock, not having built one myself, this information is entirely out of an LTD stirling engine book focused on so called "coffee cup engines" and the like. The author suggests in a stirling with about a six in dia displacer cylinder, with about half an inch of movement, using styrofoam for the displacer, cutting out four holes about an inch in diameter, and filling each with a wad of stainless steel wool, which has been squashed and formed to fit the holes, and retain its shape so it doesn't contact anything. The whole principle is based on the poor thermal conduction of stainless, with the displaced air going through the regenerator wads primarily, and as it travels from the hot to cold side transferring substantial percentages of its heat to the steel wool, so it has already lost much of the heat and concurrent volume, and a moment later, travelling through the same wads picking up the heat which was "stored" in the wool, and being pre-heated before it gets more heat. He claims substantial improvement in running, he is using a comercial made power piston/cylinder assembly, which could be got as a "sample" from a dashpot manufacturer for free, about half in diameter piston, about an in and a quarter stroke in a very fine lapped tempered glass cylinder the whole of which normally retails for about thirty dollars but free samples were available for the asking, if one appeared to be manufacturing something. I got one of the "dashpots", and it is a work of beauty, but have held off on using it, as I didn't make it. The engine built around this dashpot assembly had about a six inch flywheel of plastic, like a CD, about a sixteenth in displacer rod in a bronze bushing about an inch long and reamed out, for a snug fit, with the cylinder (dashpot) right on the top plate of aluminum, with the two plates separated about an inch or so, by plexiglass tube and held together with nylon screws and nuts to minimize heat transfer.
By "Mark's handbook of Engineering", with silver as 100 as heat conducting, and copper being 97 or so, stainless steels are all down in the below 20 range, with some being about 12 or so. As I see it, the most important factor in adding regenerator material to the displacer is keeping it in place, and shape, not interfering with movement or fit, and getting the displacer properly accounted for in the balance factor, with the steel wool be a substantial percentage of the mass of the displacer. In full sized stirling engines regeneration can account for up to thirty percent power factor, so it could be a very important issue in an LTD type I think. I've put off building one of these for the lack of displacer cylinder material, but I have a plastic CD package that is essentially a four inch tall round tube of plastic with a closed top, that fits CDs inside, that ought to be a working displacer cylinder. My own thoughts on making the regenerator plugs would be to take a proper sized tube and piece of stock to act like a piston, figure out the optimum amount of stainless wool, put it in the tube, pack it down with the piston/stock, and pack until it retains its shape well enough. I suspect some super glue is used to keep stray wire in place, and to keep the regenerators in place as well. I hope this helps open the air up some, and when I get a chance, I will build an LTD stirling according to the ideas in the book I've got. I will also find the book so I can reference it next time I read this post.

mad jack