OK, I thought about it a bit - here's some input from someone who has built a few M/Vs including a boat...
First, 20' car trailers aren't $1200 new, more like $3000. You'd do well to find a decent used one for $1200.
Your idea of a 4x4 front end sounds OK. The practical issue is it would have to go over or under the trailer tongue to get the right height. It will probably mean cutting the tongue and "C notching" it. That's possible, I did just that to mine (for a different reason). But you have to make it strong and welded properly. I think you could get the ground clearance to tow it by just removing the drive wheels.
Your plan for hydraulic power I feel greatly overcomplicates things, although I went to some pretty extreme engineering in order to achieve my boat's intended form... I applaud extra effort for that but I think you could do it easier and better. The 4x4 front axle will already have a differential offset to one side; I think you could get away with using a driveshaft straight to an engine mounted off to the side as you planned. It's gonna be down at or below your floor height.
I'd use a small 4 cylinder because it's compact, narrow, and all the power you'll need. Use an automatic transmission, it will greatly simplify setting up a remote driving position, and clutches suck for slow-crawling playa rigs anyway. I use a long shift cable from a real boat to operate my shifter, a bargain-deal one from a boatyard that made it the wrong length for the boat it was intended for.
The trailer electric brakes aren't suitable for the ferryboat, they only grab while the trailer is rolling forward, they do little or nothing at a standstill due to how they are physically made. They aren't particularly smooth-acting either, and that's important because you will have a lot of standing passengers you don't want to jostle. You could swap on hydraulic brakes, but on the playa you can get away with just using the brakes on the front drive axle because there are no hills and no real speeds, and I think that's what I'd do so you still have the electric trailer brakes while towing on the highway where you really need them.
You will definitely need a steering box. My rig uses 3/4' black pipe for steering shafts going down the left side of the rig under the floor, with a chain-&-sprocket feeding the steering box, and uses a gearbox up front to gear it down about 4:1 before it gets there. I cut the pedal crank section out of bike frames to use as carrier bearings to support the shafts; I cut off the pedal cranks and welded u-joints on each side to attach the steering shafts.
You could probably use a chain-&-sprocket to go from your top-side ship's wheel down to a shaft that feeds your steering box. You can and should use different size sprockets to gear down your steering - that makes it easier to steer and prevents sudden swerving which makes passengers fall. Tom Kennedy's famous "Whale" M/V from '02 and '03 had such a setup, using motorcycle chain.
You're gonna need a lot of lighting to get a night-time DMV license - to supply the power mount at least one extra alternator on the motor (in addition to the original one). The easiest way is to put it where the A/C compressor was. Get the A/C brackets for your motor from a junkyard if it hasn't already got 'em. I'm able to support about 1000 watts of 120VAC power draw (through an inverter) using that setup. I use GM "CS-130" alternators, from late '80s - early '90s small GM cars or S10 trucks, because they put out exceptionally high current at idle speed - and they are available cheap at wrecking yards. Carry a spare or two! The playa is murder on electrical components.
That's the stuff that comes to mind for now... I think your ferry can be built, but as easy as I make it sound, there will be a ton of fabrication and engineering to make it happen. You'll have to get right on sending in your DMV pre-approval application!! The deadline is coming!
One more thing, you might have issues with traction if a lot of people stand at the rear, you'll wanna try to get as much weight forward as you can, however you accomplish it. Maybe design it so that it's less convenient to gather many people at the tail.
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