The need for adiabatic steps is revealed by reviewing the necessities of an optimally efficient heat engine cycle:
Your requirement: Take a very large warm body at temperature $T_H$, and obtain useful work from it for a very long time. Also, don't create any entropy in the process, so that the highest possible efficiency is maintained.
"Impossible. (1) When I remove thermal energy from the warm body, entropy flows with it. (2) Work carries no entropy. (3) Entropy can't be destroyed. Thus, I'm left with a buildup of entropy."
OK, you can have a single additional large cool body at temperature $T_C$.
"OK, I'll plan to dump entropy there through heat transfer $Q$. For reversible heating, the entropy transfer is $ΔS = Q/T$, so I'll pull out a lot of thermal energy from the warm body (high $Q$, high $T$), and sacrifice a little energy to the cool body (low $Q$, low $T$) to dump the exact same amount of entropy. I'll output the difference as work."
I'm impressed! This is the fundamental concept of all heat engines—and the reason why one can't turn heat entirely into work. But you're still talking conceptually; what exactly is it that you're going to do?
"I guess I'll take a cool fluid, put it next to the warm body to heat it up and pressurize it, and let it expand."
You'll encounter a temperature gradient—i.e., a spatial variation in temperature—when you put the cool fluid next to the warm body. Energy flowing down a gradient always produces entropy. Your mechanism isn't as efficient as it could be.
"I'll very slowly compress the cool fluid while insulated (i.e., adiabatically) to bring it to the temperature of the warm body. Then I'll just let the fluid expand at that temperature and do work. No temperature gradients, ever."
You don't have the space to expand that much. The warm body is essentially infinite, and you need to produce work indefinitely.
"I'll work in cycles, expanding and compressing, to reset the system completely at the end of each cycle. I'll apply the compression at the lower temperature as part of the reset. Oh, and to address your objection about about moving suddenly between the two reservoirs, I'll wrap up the isothermal expansion at the higher temperature with some adiabatic expansion to cool the fluid down so that there's no entropy generation when I put it next to the cool body. The work I collect during this adiabatic expansion will exactly pay for the work I expended to achieve the adiabatic compression."
Summarize clearly the sequence you've developed.
"Starting at an arbitrary point: adiabatic compression from $\boldsymbol{T_C}$ to $\boldsymbol{T_H}$ (this eliminates any temperature gradient), isothermal expansion at $T_H$ (this provides output work), adiabatic expansion from $\boldsymbol{T_H}$ to $\boldsymbol{T_C}$ (also to eliminate any temperature gradient), and isothermal compression at $T_C$ (this dumps entropy)."
You've solved the required problem.
The fact that we can achieve mechanical work in the absence of energy input seems to suggest that any such system consisting of an ideal gas above 0K would spontaneously perform mechanical work on its surroundings, presumably until its temperature gets arbitrarily close to 0K. How could this be the case?
Yes, a gas will spontaneously expand to fill its available volume; this maximizes entropy because there are more positional possibilities when the entire space is explored. Furthermore, it will push a frictionless piston until its pressure matches the surrounding pressure; this also maximizes entropy. (The entropy reduction from the reduced volume of the surroundings is outweighed by the entropy increase from the gas expansion, until the pressures equalize.) Yes, the gas will tend to cool as this occurs. One doesn't have to heat a system to extract energy from it! Any gradient (e.g., in pressure) is a potential energy source.