Hi there,
I installed a GM 4.3 liter V6 and T700R4 auto transmission in my 1982 300D, and the results have been very gratifying. It gives around 28 mpg on the freeway at 75 -85 mph with 4 people in the car and the AC on full blast, and around 20mpg in town. The engine is very quiet, as it's turning nice and slow with the overdrive and lockup torque converter the trans. has. The engine is a 1991 with throttle body, which is easy to install as the ECM wiring harness is separate from the rest of the car, pretty much. The engine is significantly lighter than the 5 cyl. diesel, I had to shorten the front springs an inch or so to lower the front off the stops. The car has much better performance, and I'm not afraid to take it on long trips, I've had it to Canada a couple times, also from Washington to Montana and back, etc... I did the conversion a few years ago, and have put over 30K on it now, no problems at all.
The only part I would worry about on your car is killing the resale value. If it is original it's worth a lot more than it would be with any other engine, MB or other.
One thing to think about is the tunnel width - on my conversion it was necessary to widen the tunnel 2" for clearance on the transmission. I think there are other auto trans that are much narrower, the T200R4 for instance.
It took me almost two months of evenings and weekends to get my installation completed to my satisfaction, but it does look factory.
You can check out my site for information.
http://www.freewebs.com/rwooldridge/mercedes.htm
By the way, my entire conversion cost around $900 - the transmission and fuel pump were the most expensive parts.