Did he get it smogged, or is he just not telling the DMV its been converted? Trouble is it can't be sold in state like that unless the changes are approved by the smog police.
I've seen a white 300TD with a MB V8 in it. It looks like it shoehorned in pretty easily.
I can't understand why anyone would go to all the trouble of putting in a gasser engine as a good running 617 turbo will pull a normal sized boat.

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'95 E320 Wagon my favorite road car. '99 E300D wolf in sheeps body, '87 300D Sportline suspension, '79 300TD w/ 617.952 engine at 367,750 and counting!