Hypothetical Engine upgrade...
 

Surfing around ebay I found an interesting auction. Its a 97' E420 engine and tranny. See here:

http://cgi.ebay.com/ebaymotors/ws/eBayISAPI.dll?ViewItem&category=33615&item=2416510040

Or for big bucks, this one:
http://cgi.ebay.com/ebaymotors/ws/eBayISAPI.dll?ViewItem&category=33615&item=2417633303

I'm not planning on getting it but it got me wondering, would it be possible to upgrade a W126 with a newer powertrain? Or is it a just whole different animal?

I found this rather amazing conversion done on MBcoupes with a 560SEC.
http://www.mbcoupes.com/memberscars/T/satishtummala/satishtummala.htm

It seems like a SEL would be easier to upgrade since the engine compartment is roomier than an SEC. What contemporary engines could fit in a W126?

With enough money anything is possible. If you've studied the SEC page you'll see that there is major wiring that must be dealt with. I think this is harder to deal with than the actual fitting of another type of engine.

I think the 97' E420 engine and tranny would really be nice being that you'd get better MPG and have a nice smooth shifting 5 sp tranny. Personally I find the performance of the previous generation MBZ unacceptable!