Yes, they built one diesel-electric locomotive in 1931. It operated on a standard Heisler platform, with the usual geared trucks & center drive line. Unlike other Heisler trucks, these were outfitted with timken roller bearings. It had two Buda 180 hp engines with Westinghouse electrical components, and developed 47,800 pounds tractive effort in a dynanometer test. By all accounts a well-built & successful locomotive, but due to high cost and low demand no more were built. The unit was eventually sold to Wickwire Spencer Steel (later Colorado Fuel & Iron) and operated at their Palmer, Mass. plant until 1970. A damned shame it couldn't have been preserved. The scan below is from B.F.G.Kline's book, "The Heisler Locomotive".
A few Heisler steam locomotives were converted to diesel or gas power by removing the boiler and replacing it with an internal combustion engine & transmission. Yakatat & Southern had one of these as did Winchester & Western.
J