Well it was a hope anyway. I have pulled pistons from the bottom of V8 cars. There does not appear to be anything that would stop them if the crank was removed. And the head gasket is just another expense to drive up the cost.
But at this point, I am not going to spend another 500 on this thing.
I am either going with the turbo, or just going to scrap the car.
I am really getting tired of working on this thing. It has been the one I should have never got!

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83 300SD Dark Silver Dark brown inside

Your problem at those psi numbers are not the rings by themselves... and the tolerances for proper fit in our engines are much closer than those V8's you pulled from the bottom... So without putting in new sleeves or boring out the sleeves and putting in bigger pistons you would not have a fix you were happy with.

It would seem like the used engine was the smartest choice...
but I suggest you research the method and hookup of the transmission shifting if applicable... ( the vacuum system, etc ) ....

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1980 240d ,

chain elongation, cam marks reference:
http://www.peachparts.com/shopforum/diesel-discussion/10414-help-i-need-check-stretch.html

http://www.peachparts.com/shopforum/diesel-discussion/305365-9-degrees-chain-stretch.html

evap fin cleaning:

http://www.peachparts.com/shopforum/diesel-discussion/156207-photo-step-step-post-showing-w123-evaporator-removal-1983-240d-1982-300td.html?highlight=evaporator

A/C thread

http://www.peachparts.com/shopforum/diesel-discussion/297462-c-recommendations-mb-vehicles.html