The EMD 710 diesel engine is still in production, it's only the US and the EU where it can't be fitted to new locomotives. Even in the US, loco rebuilds can have new engines fitted that don't meet Tier-4 provided the emissions are improved over the original. There has been a surge in rebuilds recently fitting Tier-3 compliant 710s to older EMD GP and SD locos (aided by emissions improvement grants in some cases). Upgrading older 645 and 710 engines with modern computerised fuel injection has also become popular (better fuel consumption and lower emissions). I suspect that *might* happen to the early 66s eventually, if it's cost effective/possible.
On the DC versus AC drive question, the rule-of-thumb seems to be that a good, modern DC drive can get to about 30-33% adhesion factor (tractive effort/weight), a good AC drive 45%+ at very low speeds.
As a comparison example, below are some figures for the DC and AC drive versions of the US 6-axle GE ES44 locomotive:
GE ES44DC: Tractive Effort (starting) 142,000 lbs, Tractive Effort (continuous): 109,000 lbs @ 13.7 mph, Weight: 416,000 lbs
http://www.thedieselshop.us/Data ES44DC.HTML
GE ES44AC: Tractive Effort (starting) 183,000 lbs, Tractive Effort (continuous): 166,000 lbs @ 13.7 mph, Weight: 432,000 lbs
http://www.thedieselshop.us/Data ES44AC.HTML
(In reality, the AC drive version can produce over 200,000 lbs of very low-speed tractive effort - up to 36,000 lbs per axle - but normally the software limits the overall TE to avoid putting too much stress on the couplers. During GE's long-term 'high TE' test/development program on CSX railroad, a pair of the predecessor AC4400CW's pushed a coal train upgrade in a sub-zero snowstorm for over an hour, while producing over 200,000 lbs of TE per loco at times. GE has sold a lot of AC-drive locos on the back of that sort of performance...)
The upshot of that is (most of the time), a 4-axle AC drive loco is roughly equivalent to a 6-axle DC drive loco of the same engine power in intermodal and general freight service. In fact GE also sell an A1A-A1A version of the ES44AC/ET44AC i.e. four driven axles, as a replacement for the Co-Co DC-drive version that they used to offer. Two fewer axle drives brings the price down to the same level as the old DC version.