Any M103 engine will drop right in, they are all similar enough to fit without modifications. This means a 260e from the 190e 2.6 or a 260e. An M104 will fit, so will the new V6 and V8 engines, but all will require considerably modification.

The M103 is pretty common, you shouldn't have any trouble finding one.

Peter

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1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!