There are two 3.0 Diesel engines common in the US - the through '85 5 cylinder OM617 and from '86 6 cylinder OM603.96. The 603.96 was bored and stroked to make the 90-95 3.5 603.97. The 603.96 block and reciprocating assembly is a direct swap for the 603.97. I'm pretty sure a .96 oil filter housing and oil pan can be used in a .970 host, but not in a .971 host. In fact you can drop a complete .961 engine pretty much as is into a 90-91 350SD/L but you might be trading propensity to bend rods for propensity to develop head cracks. Consider using the later .97 head if the .96 has the original head if your hands are already dirty.

I'd be concerned about how much suspension work is needed in a 360K miles 126. That could cost more than an engine swap. Tranny too.

Sixto
87 300D