I too have wondered about this type of swap for a while now. I want a 5-speed diesel wagon.

What about this type of conversion where the 300TE is a 4-matic? Assuming you used the diesel car's engine & transmission (discarding the 300TE's engine and transmission) and the converted car could be RWD, is there a simple way to disconnect the 4-matic system from the front wheels? I know the front wheels of the 4-matic have weird springs, different brake caliper mounting, different tie rod ends, etc. - could those be left as-is? Are there any other complications that starting with a 4-matic 300TE would introduce?

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1989 250TD Wagon 5-speed, 160,000mi ::: Dark gray metallic / black cloth
1984 190D-2.2 5-speed, 287,000mi ::: Silver-blue metallic / black MB-tex ::: SOLD