I did a conversion myself for a 1550 kg Mercedes. See:
https://sites.google.com/site/rd28engineswap/home
I choose the RD28 for availability, low price, good quality and simplicity. It is not electronic. This is very important.
The car is running very well 5 years later.
However, if I had a Mercedes diesel or a Mercedes diesel turbo available at that time, I would choose it. It is a lot more strong in pushing.
In the US and in Europe you have this engines cheap and available. See:
Used Mercedes- Benz Engines - ASAP Motors
Diesel Engines For Sale or Wanted - diesel engine motor.com
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As one of the Forum experts said, the VW 1.9 TDI engine can be remapped to produce a lot of HP. I agree, it is true. But this has some major problems and costs:
1) The engine would be electronic. This is the most difficult task to overcome swapping the new engine.
2) The engine would be stressed a lot and may not last long.
3) The remapping is not free. About 600 USD.
I have a 1.9 TDI PD at present in my Skoda Octavia, and it is a wonderful engine. However, maybe the main advantage is itīs high fuel performance, that I think will not remain equal if we remapp it much.
Here is a swap specialist with a non electronic 1.9 TDI:
http://www.rocky-road.com/diesel.html
However, I think it is small for your car.
My dream engine for a swap would be the MB OM611 or OM612, wich are electronic, variable geometry turbo (as the VW 1.9 TDI is) and very strong. I would recommed that engine if you have a lot of money and a lot of time.
See here for a swap with this engine:
Mercedes-Benz revives the legendary 190D with BlueEFFICIENCY technology - 4wheelsnews.com
They did it, but learn from them (not from myself) what they say about the difficulties managing the engine electronics.
Summarizing:
From the best of my knowledge, choose a non electronic engine, choose a turbo, choose a Mercedes in the first place. Trustable, cheap, strong, durable, economic, available, with lots of spare parts in the US. What else do you want?
Keep us informed of yr progress. Best,
Oldbeaver