No ,I am not rebuilding this engine.
I just got my hands on a junk block.
See my thread:
http://www.peachparts.com/shopforum/tech-help/310618-another-reason-change-your-timing-chain.html
It's the same block.

The process shown is the one that Mercedes recommends to re bore this blocks.
The 4th stage removes a few thousands of a mm of aluminum from the cylinder walls, leaving the silicon behind.
This is done by rubbing the silicone paste into the cylinder wall, using the felts instead of stones in the honing machine.

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76 240 D. Bought in 1998 for $25.
85 300D. Got it for free with a bad engine. ( Sold )
60 Unimog 404. What was left of it, was given to me. Now powerd by 617A.
88 560 SEL. Bought without engine and trans. Now powerd by 617A.
67 250 SE. Cuope. For resto or sale.
64 220SE. For resto.