I would take off a little more on the side next to the headlight. Especially down towards the bottom. Not a bad start though!
I have to elaborate some on the ECU swap. It could very well be that the performance improvememnt provided by the 86 ECU was because it was a non-Calif ECU, not because it was an older ECU. There are several different ECUs with several different part numbers for both the pre-90 W124s (CIS-E gen 3) and the 90-93 W124s. (CIS-E gen 5). Some years Calif cars had their own unique ECUs, other years they didn't. And remember, just cause you're not in Calif doesn't mean your car's not from Calif!
I also don't know if W201s ever got CIS-E gen 5 or did they just stay CIS-E gen 3 like W126s did.
So anyways here is a thread where I talked more about this ECU stuff:
http://www.peachparts.com/shopforum/performance-paddock/271612-m103-cis-e-performance-ecu-module-thread.html