I'm aware of some large ships that do that, using either a sterling engine or maybe even a steam engine to put waste engine heat to use.

I have heard of a 6-stroke engine. The idea is, intake compression power exhaust steam exhaust. The four strokes of the Otto or Diesel cycle happen, and then hot high pressure water is injected directly into the cylinder which flashes to steam and expands, pushing the piston, and then another exhaust stroke lets it out. This puts much of the waste heat out through the crankshaft rather than wasting it via radiator. It's not without its problems though.

We actually do. F1 engine's have something called the MGU-H that recovers exhaust gas energy and turns it into electricity that can be used to recharge the hybrid system: https://www.racecar-engineering.com/articles/tech-explained-formula-1-mgu-h/

Technically any turbocharger is doing the same thing except it's hooked up to a compressor for the intake air instead of a generator.

There were some cars that used Stirling engine (Czech wiki cuz better picture) instead of internal combustion ones.

Thermo dynamics, in short.

In long, because adding some heat recovery system to the engine block would mean decreasing the cooling efficiency of that block, thus making the block hotter, and decreasing the efficiency of the engine. Since the engine makes power based on the differential of heat/pressure from the top of the stroke and the bottom of the stroke. If you make the system hotter, then less energy can be extracted per unit of heat produced from burning fuel. Any energy generation from the waste heat of the block would be offset by efficiency losses in the engine it’s self.

Now, most engines don’t actually extract all the energy they could from that differential, which is why turbo chargers are a thing. They use excess heat in the gas exhausted out of the block, expand it to ambient pressure and temperature over a turbine, that turbine then runs a compressor, and that compressor raises the pressure at the air intake. More air entering the engine in the same volume allows for more volume of fuel without having more fuel than oxidizer to burn it, thus increasing the energy density of the charge, increasing the differential in heat between the top and bottom stroke, increasing power and/or efficiency depending on it’s tuning. But that’s not utilizing heat from the engine block, but heat in the exhaust.

In reality, an internal combustion engine and a turbine operate on the same principle. Make gas hot, it expands and makes a thing move. The difference is just that in a steam turbine, the gas being expanded with heat to do work is steam, and in an internal combustion engine it’s the exhaust gasses of the combustion it’s self that are expanding to do work. In a piston engine that expansion is acting on a linear reciprocating piston, but in a turbine it’s can’t on a spinning set of blades in a continual flow. In the middle there is the gas turbine, where the working fluid is the combustion gas and it’s working on a spinning set of blades, this is what a jet engine is.