My guess:

1) Bore block oversize (not a big deal, it's iron)
2) Custom pistons (I think? $$$)
3) Stroker crank (is the 3.5L diesel a donor?)
4) Not sure if custom rods are needed, or if some OE rods will work (??)
5) Custom cams would be needed to maximize power output ($$$)
6) Engine management is the next question - CIS? HFM? Standalone aftermarket?

I'd consider picking up a C36 motor (available for ~$2-$3k) instead. Potomac Pat dropped in a late M104 into an early W201, no reason you couldn't do something similar with a C36 powerplant. It would be easier if the recipient was a late 124 - I think.