A 328 will be good enough until you start adding GPS etc. Then it will be short of memory. But you can easily config the setup and test to compile in Arduino ide to get a Idé of sketch size.
interesting design. from that drawing it is not entirely clear how steering works - two servos to tilt the entire motor+props drive train? You will likely face similar challenge to dualcopter: no fixed reference point for tilting the propeller plane against. Most dualcopters use some kind of stabilizer fins to reduce counter movement of the body. good luck and keep us updated. We could help you with the mixing code if needed
I'm sorry - here a long time yet to look .. Yes, engines and propellers work as HERE (I use a translator, and I can not properly be called ..) Thank you for your offer of help - would definitely use : D