That's way cool. Is your new diff limited slip, or standard (open)? I'd think you'd be lighting up the right rear most of the time.

That's interesting about the speedo, I thought you'd replace the drive gear in the transmission, not change the speedometer gearing. But, whatever works & is accurate, I guess!
On a related note. Has anyone looked into stuffing the later 5-speed automatic into a W124 chassis? That would allow an even lower rear end, like a 3.07 or 3.27. Here's a PDF with the gear ratios for the 4-sp and 5-sp trannies:
http://www.meimann.com/docs/mercedes/Tranny_ratios.pdf