Originally Posted by t walgamuth

I have not read the whole thread. It is my thought though that I'd probably not deviate from the stock ratio more than one step.....in other words perhaps a 3.58 or a 3.46 especially if the car is a stick. YOu could get by with a 307 for example if you have the automatic probably but the car will be pretty sluggish (what am I saying a 240d automatic is very sluggish.) The 307 would make it much more sluggish.

I built a 123 body starting with a 240D. I put in a euro 300D and ultimately had a five speed overdrive unit with the 307 diff behind it. Anything taller than that would not be a good setup, but with that engine the 307 was fine. Once accustomed to it it worked just fine. ...and it would routinely deliver 35 mpg. Running on roads with 55 mph, my daughter had a couple tanks that delivered 40 mpg.

That setup was a pleasure to drive.

Originally Posted by t walgamuth

The speedos are matched from the factory to the diff gear. If you deviate from the stock ratio you need to swap the speedo along with the diff. if you want it to be accurate. Same is true for tires. If you change the diameter significantly you'll throw the speedo off. a 3.07 came in the 300 turbo and the 300 SD until 85 which it changed to 2.88.