Your biggest issue isn't "if" it would work, it is "how many EPA laws your breaking in the process". I can think of three that come to mind immediately and that's before I start thinking of the health dept. issues and on top of all that I'd put my own health as a paramount thought. Wood burns very well all by itself and your adding diesel and old oil !!
It might work if you can get past the smell and the above health, EPA and safety issues, basically your making a "poor mans" creosote.
If it were me, I'd be heading to a good hardware store and looking at natural oil based stains, Cabot's make very very good quality stains and sealers.
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