We were in the same boat, tried a bunch of different things and nothing really did a good job. Kerosene worked slowly, smelled, was in the way, and had to always haul fuel. Elec. - had to get an industrial type of unit - the shop was going to take 4 to really work and then I was going to be using a LOT of elec to run them. We dont have nat. gas (wish we did) so I got that larger (115K) industrial propane one I mentioned above. I think it was around $800 - yes it was not "cheap" BUT it works. I had a 500g propane tank put in (think it was $100 and they installed the tank and ran the lines to the heater, then I paid to fill the tank which I was to say is $2.80 or something like that a gallon).
The elec bill is nothing every month -like $15 on avg and that is my dusk to dawn lights, the power I used to work, the power for the fan on the heater, everything. I have a thermostat that keep the shop at about 42F all winter - keep my stuff from freezing and my diesel truck stays in there so it keeps it warm enough for easy starting without plugging it in. If I was to work in there I flip the heat on about an hour or so ahead of time and when I walk in I take my coat off and ALWAYS work in a tee shirt because it is 70 in there. The only thing is the floor itself and big steel items stay cold for a good long while until they adj. I don't recall how much gas the heater use but it is not too bad at all. Last year it cost me around $700 to heat it all year and I was in there A LOT!!!! Not like a night here and there I mean every weekend, most nights, and every other day I had off. May not be the cheapest way to do it but it really works great.
The other fellow that mentioned using a old house heater is also a good idea. In southern WV a used heatpump with back up elec should work well and be fairly inexpensive to run - plus you could get A/C for the summer which has it advantages!
