What is the ideal construction for a heat engine?

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To begin, how would an ideal engine be constructed.


Ideal Construction is Impermeable to Heat

Sadi Carnot did not describe construction of his cylinder, possibly he thought it was obvious. In any case, Lord Kelvin's spells it out. An Ideal construction is impermeable (insulated).

"Reflections" pg 141 (steam engines) by Lord Kelvin

paragraph 15. Let CDFE be a cylinder, of which the
         curved surface is perfectly impermeable to heat,
         with a piston also impermeable to heat, fitted in it ;
         while the fixed bottom CD, itself with no capacity
         for heat, is possessed of perfect conducting power.
         Let K be an impermeable stand, such that when
         the cylinder is placed upon it the contents below
         the piston can neither gain nor lose heat.

pg 152 (Air engines) by Lord Kelvin

paragraph 22. In the ideal air-engine imagined by Carnot
    four operations performed upon a mass of air or
    gas enclosed in a closed vessel of variable volume
    constitute a complete cycle, at the end of which
    the medium is left in its primitive physical condition;
    the construction being the same as that which 
    was described above for the steam-engine, a body
    A, permanently retained at the temperature 8, and
    B at the temperature T\ an impermeable stand K\
    and a cylinder and piston, which in this case contains
    a mass of air at the temperature S, instead
    of water in the liquid state, at the beginning and
    end of a cycle of operations. The four successive
    operations are conducted in the following manner :

Why? Kelvin and Carnot both spell out the necessary condition for maximum work from heat, is that no heat is lost to diffusion. So unless it runs in a vacuum (which is insulation), it must be insulated.

The first Ideal (Insulated) Heat Engine, 150 years ago:

Lord Kelvin's Ideal Cylinder