I think the 606 in a W126 looks like a natural fit. It seems as if it belongs in that car. The 60x engines are the only diesel engines I want to own, at this point in time. Even with all their quirks. And especially after seeing the abuse they can take. 12 valve head is good for horsepower, 24 valve is better for torque.

The one thing I am leery about: US E300 turbodiesels had 10K mile oil changes on dino oil. Maybe it's sticky rings or something, but the majority of low mileage E300D's I have seen have concerning amounts of blowby(I mean, only 100K miles and there's a visible mist? Looks like a 300SD 617 with 300K miles). They also crack their injectors at high load(at least it sounds like it).

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1987 300SDL (324000)

1986 Porsche 951 (944 Turbo) (166000)

1978 Porsche 924 (99000)

1996 Nissan Pathfinder R50 (201000)