The side sump in a 603.96 oil pan won't clear the W140 K-member so you need a .971 oil pan; possibly a .970 oil pan will work. I never bothered to confirm that the .961 pick up tube works with a .971 pan. I moved the .971 oil pan and baffle to the .960 block when I did the swap. My memory is very rusty but I might have swapped main cap bolts as well to be able to attach the baffle. If you swap oil pumps but leave off the baffle, use spacers between the oil pump arms and main caps to account for the thickness of the baffle.

You can keep the front dipstick from the 603.961 but you might have to recalibrate it. Assuming the .961 goes in dry, fill it with 2 gallons, run the engine to fill the oil filter, then check the level on the front dipstick. Call that the real MAX level which might or might not coincide with the actual MAX mark. If it's way off, try a 606 dipstick.

I don't know what you mean by machine the dipstick into the block. IIRC the .971 dipstick goes into the the driver side of the oil pan, not the block. Other US 603s have the dipstick tube pressed into the front cover so your .961 has front cover should have a dipstick tube. If I'm correct that that the .971 oil pan comes with a dipstick tube fitting (and a dipstick tube!), you have to use that anyway fitting the .961 block into a W140. If you go with the front dipstick arrangement, a .970 dipstick (and tube?) might be more accurate.

I didn't bother to compare .960 and .971 oil filter housings. It wasn't worth flubbing the exercise and saving the cost of a gasket to discover that the oil cooler lines don't line up with the oil filter housing. You'll probably make things easier if you pull the .971 engine with the oil cooler lines. I didn't and it was a challenge to reattach the the oil cooler lines to the oil filter housing in the engine bay.

IIRC the .971 has a loose bracket between the AC bracket and front cover. The .971 might have a couple of longer front cover bolts for that loose bracket.

Don't do this job in a rush. That's a sure way to mess up.

Sixto
87 300D