To better understand your ideas on the effects of n-C4 as a diluent and the sidestream removal of C4's, could you please give some details on your alkylation process, such as the acid used, the refrigeration details, etc., as well as on your (recycling) de-isobutanizing tower ?
Some HF alkylation units actually operate their de-isobutanizer (aka Isostripper) in a way similar to your second idea: a propane-rich stream leaves at the overhead which is re-distilled to recover i-C4, an upper recycle i-C4 sidecut, a lower sidestream composed of n-butane, and an alkylate bottom stream.