don´t forget to cool the cold side of the heat exchanger and mount a little motor driven by the the flywheel and use it as a generator (measure voltage and current (connect a led or something else))
So I'm having trouble understanding the effectiveness of the steel wool, with the hot end of the displacer closed. Seems to me like it makes it so when the displacer is in the hot end, you still have a lot of air down their inside the wool. And vice versa - when the displacer is in the cold end, you still have a lot of air up THERE. Why do we not seal both ends of the displacer, so that the air it contains is isn't part of the working volume? You cited this as a possibility - putting another wooden cap on the cool end of the displacer. Have you tested the system in that configuration?