This is my understanding of that model:

1993 was the only year for that motor (M104-942) in the US. It essentially replaced the 'downpowered' 300e 2.6 (1990-1992) (formerly 260E) in the lineup. The newer motor had 194hp vs. 158hp for the older 2.6 (M103.940) , but the newer car was about 350lbs heavier, so not all bonus.

For the 1993 model year, the 3.2L 24v M104.992 engine was also introduced. It put out 217hp/229ftlbs vs. the prior 3.0L M103.983 motor @177hp/188ftlbs. As mentioned, the new car was heavier, so it was not all bonus here either.

My thinking is that there are plenty of 3.2L cars out there, so going for a 2.8 may not be the best choice. It's a pretty heavy car for such a small motor. I cannot say whether the 2.8L had the same probability of headgasket failure as the 3.2L, but at this age, most have probably had their day of failure and been fixed, or established their immunity. Bet you could get a 3.2L for similar money.

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1986 300E 5-Speed 240k mi.