I might be trying it myself, if I can't get my 88' 300 SEL running right(mysterious electrical problem). I was thinking about using the 3.8L roller cam engine or a 4.3L engine. One thing that has held me back is not knowing about the gear ratio in the rear end. I'm thinking that it would need a higher gearing to work with any of the GM engines/trans.
You just bypass and eliminate all the mercedes problem electronics.
Go for it