I know of three W123 LSD conversions done in total, I didn't do them myself, it was a good friend, (he did all sorts of weird stuff, lister diesel jaguars, etc) but he's been dead this few years so I can't find all the details of why and wherefore, I do know that all three featured Jag LSD's if that is any use.

I also know that the only equipment he had besides the usual garage tools was a 6" swing lathe, and I *think* the only lathe work he had to do was shorten the axles and make a couple of bolt up to crimp (like hose clamp) sleeves for the merc suspension to attach to... but the axle shortening might have been down to his other signature feature which was really wide rear rubber on gkn wolfrace alloys