I don't know where you saw that figure of 17.5 inches... maybe a typo or the one scale loco that was made in LionChief+. But the GP7 is the same size as the postwar version, as with some of the other LC+ diesels that have their origins with earlier postwar/MPC models.
Though you must be aware that even the postwar/MPC version GEEPS still tower above most traditional rolling stock. Because even those earlier versions are pretty close to scale in their overall dimensions, albeit if lacking in other details and accuracy.
What I find interesting is the new starter set Tier 4 diesel, which is listed with a 16 inch length in the latest catalog. I don't consider that a traditional size, even if it is smaller than scale. Even on 031 curves, there will be a lot of overhang. Unless of course, that number is also a typo.
Though many of the traditional locos are listed in Lionel catalogs as having a minimum 031 or 036 diameter curve, some of them will easily make 027 curves. One could suppose because 027 track isn't made anymore, that would be the reason. Although if they have lower fuel tanks than the postwar/MPC versions, that could cause problems with 027 switch box housing. Many traditional rolling stock items though, still have their minimum curve listed as 027.
