If your contracts say no liability for yourselves, and you've done the CYA documenting who's requesting it and who's responsible (your direct manager and etc.), it shouldn't matter, legally speaking.
As for ethically -- I would think about a range of actions:
- Ask the manager(s) for special authorization and indemnification, stating that this engineering work is provided by undersigned (worker) as-is, no assurances for fitness, safety, regulatory compliance etc., and that undersigned (manager), as a legal representative of (company), takes full responsibility for the project.
(Again, might not mean anything if this is already in your contracts, but interesting to emphasize the weight of the immediate matter. And if it is, just bringing up and clarifying that section of your contract would do.)
- Elevate. If (immediate manager) isn't concerned, is (higher up)? How about corporate?
- Start a petition, get signatures from other engineers in the dept / company / field, agreeing that this is not a great idea, and that at the very least sufficient materials (training, regulations/standards, etc.) be provided, but preferably it be done by someone imminently qualified.
- Report it to relevant safety authorities. OSHA, uh CSB, whoever. They will likely take it seriously. I don't know how exactly they deal with design side issues, but ask around, I'm sure they are very helpful and can provide direction.
- And yeah, asking a lawyer isn't a bad idea. Their power may not extend very far beyond the law (which, see first options), but lawyers are accountable to their ethical code and you may find they are sympathetic.
Oh, hm, as for a more offensive tactic -- if you can find regulations that show the relevant hardware must be designed by a licensed professional engineer (PE) or something to that effect, that's direct (legal) liability to the company, and corporate will want to see that (and if they turn out disinterested, you know exactly where to go (the PE society) straight after!).
Tim