Obviously you can fit the 4.2 (m119) V8 in a '94 or '95 E-Cabrio, as the nose is the same and you could get this engine in the sedan. Go for a later m119 engine, you get 275bhp and 295lb-ft torque. You also should be able to fit the trans from the 400E or E420 into a 320 Cabrio, as the tunnel size is the same (or appears to be) You will also need to change the rear differential. The E320 with m104 engine (stock) uses a 2.65:1 rear diff; the m119 powered E's use a 2.24:1 diff.

About the above comment, "I wouldn't want an m104 because of wiring / headgasket, etc" all I can say is many members of this forums and many MB experts would probably tell you the m104 engine is one of the best engines in the world, if not just in an MB. It produces 217bhp, 229lb-ft, 3.2L I-6, all-aluminum construction, DOHC 24V, gets 27mpg on the road, has variable timing, and the engine just does not wear out. Mine needs a headgasket right now. So it leaks oil. But it does not hurt the engine. The headgasket change will cost about $1,000, done by an MB specialist. On later m104's, the wiring harness was not such an issue as on earlier models. It is not an issue on my '95, for example. And, oh, BTW, that wiring harness was an issue on EVERY model of Mercedes during the 1990-1993 years, or so. The 400E, between 1992-1993, was just as likely to have a failed harness as any 6-cyl model. The truth is, the harness costs about $800, and it is an easy D-I-Y. It takes maybe a couple of hours. And, the problem was with a material MB chose as part of an "environmentally responsible" campaign for degradeable auto parts. In some cases, an MB dealer will GIVE you a harness free of charge.
So at this point we have $1800 of known maintenance. If you got the harness for free and changed the gasket yourself, that number would be a couple of hundred. Compare that to the lifespan of a well-maintained m104, which can be upwards of 400,000 miles of eseentially trouble-free motoring and who's complaining?

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2002 Mercedes-Benz E320 4Matic
1995 Mercedes-Benz E320 Wagon
2005 Land Rover LR3 V8 SE
1999 Audi A8 4.2L quattro