The transition to renewable fuels is critical to reduce greenhouse gas emissions and achieve carbon neutrality in the transportation sector. Ethanol has emerged as a promising biofuel for compression ignition (CI) engines due to its renewability and low-carbon profile. However, its low cetane number, high latent heat of vaporization, poor lubricity, and corrosive properties severely limit its auto-ignition capability and durable operation under conventional CI conditions. Building upon previous work using a Rapid Compression Machine (RCM) to assess ignition improvers for ethanol, this study explores a broader range of fuel formulations to enhance ethanol-based combustion. A total of nine blends were prepared, consisting predominantly of hydrated ethanol (50-80% by volume), combined with 5-25% biodiesel and up to 5% of a commercial ignition improvers. The biodiesel component acted both as a co-solvent and as a combustion stabilizer, particularly under cold-start conditions. Tests were carried out under both hot and cold-start conditions, across compression ratios ranging from 25:1 down to the ignition failure limit. To ensure equal injected energy input, injected fuel mass was adjusted based on the Lower Heating Value (LHV) of each blend. High-resolution pressure transducers and high-speed optical imaging were employed to provide direct experimental insights into the combustion process, validate thermodynamic trends, and support comparative assessments of ignition behavior across different blends and compression ratios to evaluate key combustion parameters. The results indicate that blends enriched with both biodiesel and ignition additives, particularly E900B50A50, E925B50A25, and E925B25A50, significantly improved auto-ignition performance, enabling complete and stable combustion under compression ratios higher than 23. Uniform flame front propagation was observed across all injector nozzles, indicating complete combustion and effective fuel–air mixing, which are essential for maximizing thermal efficiency and minimizing unburned emissions in CI engine operation.