I'd look really hard into using the complete W140 engine / FI system. K jet is $$$ when it starts to fail.

Your conversion info sounds correct but I can't offer any verification.

What is wrong with the old block? Cylinders can be resleeved if you have a bad hole.

For a head gasket I'd use one that matches the bore size. ( the newer motor ) but would compare coolant holes to be sure it matches the older engine. ( Since you are using the older water pump. )