Okay... I know this topic is 3 years old, but a LOT can happen in 3 years. I just found this post yesterday, but I have been playing with MB Diesels since the 90s and have a couple friends in Sweden who own numerous HOT ROD MB Diesels. Their popularity is taking off here in the US now.
Here are a few facts for y'all... Yes, there were a few bad OM603s in the late 80s and very early 90s, but the bad ones are gone by now and they can hold 350-400 hp from changing the injection pump to a 7.5 ($800-1200), a custom exhaust header (~$800), and turbo ($300+). No opening of the motor otherwise.. No cams, ignition or voodoo trickery needed. OM603s are all mechanical (for the most-part) and are awesome for cars, trucks and off-road vehicles, because they take minimal maintenance, are 100% durable and easy to fix. There are a few places who now sell/make adapter rings for OM60X for easy trans swaps into a lot of different chassis. My friend in Sweden has a 32 Ford with one that he took from an old taxi with over 400k km, put a 7.5 Dieselmeken pump on it and the biggest turbo he could find and beat on it for 5 years before he blew a head gasket! He also has a '56 Caddy with one in it too. Stock 722.3 4spd transmissions too. A few BMW manuals fit easy if that's how you want to go and have great sources to find them. Again, that is OM60X motors (602, 603, 605 & 606)
OM606s are the Superstar motor, but the CDIs are now just being figured out and making even more power! An OM606 can run a full mechanical pump, where you can put it in anything without a computer and with any transmission. Without opening the motor, they'll handle 400-500 WHP reliably and still get around 30mpg! Again, all one needs to change is the injection pump (7.5 mm for street, 8mm for serious power! 600+), exhaust header, turbo and add a bigger inter cooler. For maximum tune ability, you can opt for an E Injection pump in 7.5 or 8mm, and a DSL1 computer. The 5 spd 722.6 transmission is great as well, either have it rebuilt to AMG V8 specs or find an AMG trans to use, but they're electronic too and should use an OFGear trans controller. With the DSL1 you can tune your fuel delivery, boost pressures, redline, etc. and with the OFGear (which will talk to each other) one can adjust line pressures for shift firmness, shift points, paddle shifters, etc. For serious power & high revs (6000-8000) there are beefy rods, main cradles and valve spring kits. THAT's IT! For a gas motor to make 500+ WHP from 3 liters, you need cams, ignition boosters, pistons, cranks, rods, head work, on and on.. AND you still won't get anything close to 30 MPG! Dale at DieselpumpUK puts these motors in Gwagens, 124s, 123s, a classic Charger and his own Ford F-250! He makes lots of parts and Dynos these all the time. FTune makes a lot of parts and builds these all the time, as does the crazy Russian at Turbobandit. My friend in Sweden has an OM606 in his '55 Caddy and another with a supercharger in a 34 Volvo chassis. There's a new company here in the US that is importing lots of the Euro parts, BenzForce.
The common rail Diesels after the OM606 (I forget their numbers) are currently being tested/tuned by Baldur Gislason (DSL1 creator) in Iceland and the Black Smoke Racing guys in Finland, among other awesome builders on SUPERTurboDiesel.com
I track my 99 E300 and even autocross it in its mostly stock form now.