They would've had to raise the compression ratio and lower the boost to realistically accomplish that kind of critical altitude. On the other hand, if they just made that the service ceiling, not the critical altitude? Maybe it's possible?
That said, this engine has been STC'd for 182's for 5 years or so now, whats the big news? For a while, Cessna offered the 172 with the Theilhart from the factory, I didn't see that selling well either... and it didn't.
There is a reason why Diamond doesn't sell the DA40D here, and why they have a Lyc powered DA42. The economics don't make sense on this side of the pond.