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I did a major service on my cousin's 92 500E, and I can tell you that the V-8 is pretty much shoehorned into the W124 chassis. I doubt the 420 has more room, as it's still an M119 V-8. I had thought the M103 six was jammed into the W201 chassis, but it's not like the V-8 in the W124.
That said, I was able to complete all major tasks without major drama.
The M119 is one strong engine. The bottom end can withstand 1000hp. There are a few issues, but nothing major. I would rank the 1995 W124 E420 as an excellent buy as they are new enough to find excellent examples, but old enough that prices are pretty low.
The only real thing to worry about on ANY 1995 Mercedes is the durned wiring harness.
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