would be much more economical and logical to swap it to a 560SEL engine, they are bolt-for-bolt compatible and will pull as hard as any panzy-ass iron OHV lump.

you have a M116 (late 4,2 liters)
you can swap in, directly, a M117 (5,5 liters (badged as 5.6 liters)) with no modification, upping your HP level by approximately 50 and the Tq number by more than that.

if you EFI that motor, you gain another 50hp.

a Fe S383 OHV weighs better part of 100lbs more than the Al M116/M117 so any potential of more HP, you lose immedately from the added weight and carburetion.

also, I think a chevy motor in an SEL is sacrilegious. I think its ok in a W201 or a W124, but there is no reason when the MB motors available are better than a SBC. and require no modification.

__________________
1992 850i 6 speed
1991 M3 S54B32 swap
2007 328iT/6 RWD sport wagon
1987 325E 330iZHP engine swap
2004 Vespa 200GT
1976 W115 240D getting a much bigger engine. 5.5L
1997 R129 SL600 5AT