I agree that it is feasible - I did it with a '79 280E and a Euro model donor car. I would recommend getting new or rebuilt hydraulics.
Flywheels are balanced to the engine, so you should mark the old flywheel and crank with a punch when you remove it. Then the new flywheel should be statically balanced to the old and marked with a punch for reinstallation.
I am not sure I explained this very well but any competent machine shop will understand.
There was a long post awhile ago about a guy who put a 3.0 DOHC with a 5 speed in a 190E. He works at Potomac German Auto in Maryland (on web) and you can talk to him.
This is a great thing to do - don't be discouraged by the nay-sayers!
Falls Church VA
'86 300E 5 speed
'95 C220 (wife's car)
'98 Porsche Boxster
Past: '79 280E, '82 300D (18 yrs), '77 240D,