Not that I am against swaps, but this one would be a lot of work, and probably impossible if you could not take the parts right off the 320. The 107 was offered with the 3.2 outside of the US, so it is possible. But you would need stuff like the arms that hold the engine to the mounts that would have to come from a foreign recycler or (shudder) special order by a dealer.

I think a huge challenge would be getting the 3.2 EFI brain to work in the 107. The wiring harness would have to be transplanted from the 3.2 or built from scratch. I don't know if you would need to adapt the Hall effect sensor from the 3.2, but that's representative of the problems you would face.

Getting the exhaust plumbed correctly might require a whole new exhaust from somebody like Timevalve.

And then I think the CARB guys would absolutely freak out when you try to smog it.

And then there's linkage, cooling hoses' position, AC compressor and AC plumbing and probably 14 other issues I can't think of.

I would say a (financially) better option would be an as-is sale of your 107 or fix the valve problem. That's a fine DIY job. You might be able to just do the seals to fix the smoking.

Good luck,

__________________
Chuck Taylor
Falls Church VA
'66 200, '66 230SL, '96 SL500. Sold: '81 380SL, '86 300E, '72 250C, '95 C220, 3 '84 280SL's '90 420SEL, '72 280SE, '73 280C, '78 280SE, '70 280SL, '77 450SL, '85 380SL, '87 560SL, '85 380SL, '72 350SL, '96 S500 Coupe