I had headaches for a week straight. My wife kept offering me aspirin. I told her I don't have an aspirin deficiency. Something else was causing my headaches, and that I wanted to find the cause of the problem not just treat a symptom. Turns out it was too much coffee and beer and not enough water in the Texas heat.
Your engine does not have an ether deficiency. There is something else causing it not to start.
Besides that, starting fluid can damage a diesel. That stuff is made for people that don't want to fix their gasoline engines, not diesels. You can use WD40 to start and run your diesel with safely.
To be honest with you I am just repeating this to you from people I trust. I don't know for sure the real reason not to do it. But if I had to guess, I would say it is because your little diesel has 20:1 compression. A performance gasoline engine has 10:1 or 11:1. Gas explodes at a much lower compression than diesel will. When you spray ether in the chamber, the piston starts compressing the gas. It explodes before the piston reaches the top. This can bend the connecting rod or probably a host of other real bad things.
The high compression is what makes diesels so much more efficient than gasoline engines. But you rely on that compression to ignite the diesel/air mixture.
Another guess I will make is, whatever is causing that sound is what's causing it to run worse and worse. I think you made a good choice taking that engine out and finding out what's wrong with it before something catastrophic happens.