I don't see any step down trans in there either. The Oliver step-down trans kit used a Ford Model A (car) three-speed for a aux.
The original Hercules is a good little engine. I've seen HGs with all sorts of engines stuck in (not very good jobs though). I've seen them with Wisconsin air-cooled 2 bangers, Chevy Chevette engines, etc. Another Hercules would be a easiest, and next to that a Continental flathead four banger.