As a 10 year mb indie tech I can tell you that I've never seen anyone come out ahead on a mercedes engine rebuild. Almost always cheaper to simply replace an engine . That being due mostly in part to the high prices of mercedes engine parts. If you've got machine work and labor covered you've got an edge that could make it feasible.

You should pull the engine from the 300D, rebuild it, and stick it back the 300D. It would be an awesome learning experience for you. You could then take what you learned and apply it to a custom engine build for your SD.