No I don't think a 4spd shifter will work with it. It's a completely different setup. There were 2 different shifters used with this transmission. The early ones had reverse behind 5th gear, the later ones had reverse next to 2nd.

Yes the flywheel will fit just fine. The diesels got their RPM signal off the starter ring gear so pretty much any w124/w201 flywheel will work. The 86 trans had a single mass flywheel

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