This came up on a jeep board. I had an 1980 300SD with that motor. I expressed my opinion stating it would be a bad idea. People beat me down pretty hard. I ran that car for about 100k miles; I am familiar with how the motor runs. It was great for economy but no power esp. at low RPMs. When the turbo came on it did make some more power but for a trial rig or one built for crawling the power came on to late in the rpm band, and for a mudding or other off-road where you may run more often at higher rpms the power still wasn't enough. Their solution was gears. That would help. But I still think with all the money and effort it would be a waste.
The person went on with the conversion. The thread seemed to end before the conversion was complete. My only conclusion could be it wasn't successful or successful enough to continue with the post.
I just checked the post and not sure what haapened with the Mercedes motor but the poster is now working with a larger cummins, that could be a very good swap.
If you want good gas mileage get an old Mercedes diesel and for your commuter, I have had two. A 1980 300SD (has the motor in question) and a 1984 190D.
If you want to do the diesel conversion pick a different motor.
I read the link and things worked out better for him, I would still rather keep it in the Mercedes for a daily driver and spen the money need for the coversion on my trail rig.
Another issue could be getting it registered. Some states have emission testing and or visual inspections. Some states will have laws that will not allow you to register the vehicle if you do the swap.
I just checked the post. He is now working on a swap with a 4.5 cummins, that could be a good swap. The post isn’t that recent so no word on its progression and I am not sure what happened with the Mercedes swap.