First off, thanks for the great (and clear) info. I never knew that about the m104.
I agree that an engine is most efficient in converting fuel into work at the torque peak. But I think the engine is more efficient in converting fuel into distance at a lower injection rate (or lower rpm) - to a point. Without analyzing the dynamics of combustion and knowing everything about the engine, I like to put the freeway cruising rpm a few hundred above where it would chug or shudder with open throttle.
I haven't even driven an e320 yet, so I will before choosing my diff.
The goal of my swap.... good question! I guess the main goal is to convert it to a gasser. I'm sorry, I know people on this forum love the diesels, but I don't.
I love them for their reliability and simplicity but they're too slow for the big cities, and I've had it. So in a nutshell:
1. convert to gasser
2. easy to swap in
3. can pass minivans and priuses at any speed
4. some efficiency would be nice, maybe 20+ mpg
#2 precludes V8s in my opinion. I don't want to cut the tunnel open for a big american transmission. And I don't want to convert to rack & pinion if I don't have to.