Yes, doing it this way saves a lot of labor for sure. So far it looks great, but then I only completed the build last September and it has only about 700 miles so it hasn't been much time. My experience with digital prints is sometimes the edge tends to lift and peel. So I used a thin strip of regular black vinyl to lay down over the edge to seal it. You can't really notice it as it blends in with the rest of the design. I don't expect any problems there or due to engine heat because of the open-air nature of the engine compartment. I don't think it will ever get hot enough.This sounds like something any sign shop that does vinyl could do, correct? And adjust the size of the squares at design/layout time if needed? I had only seen this done with paint which requires extensive masking, cutting, and striping. And you are limited by the std tape widths (1", 1 1/2", etc.). And then the other color of paint has to go on, tape removed, touch-up... I think you really came up with a great solution that saved you a lot of work!
One other question, how has it held up? Does the heat from the engine cause any problems (lifting, bubbling, peeling)?