I have MSII installed in my 450SLC including spark, and it makes a HUGE difference.
Wont be worth it with a dead cylinder tho, and as to getting it fixed and the heads shaved, i wouldnt, the heads have a really close tolerances already an the little bit you take off wont affect the compression in a noticeable way. Fixing the cylinder will cost as much as getting a second hand low milage alloy engine like a 380, and a 450iron block is cheap as chips atm. 560 M117 is the easiest powerful engine to put in but will cost a bit to buy, after that the M119 fits with ALOT of work. The M119 is quite abit bigger so its harder to fit.
If you really want to get the car moving really well look around for a M113 V8, some people say its not as good as a M119 cause it was a mass build engine but its smaller lighter, revs better, more economical and the same amount of power with a even flatter torque curve(Can u tell i love it, once i have saved up some money a 5.5K is going into my 450SLC), controlled by a MSII or some aftermarket ECU should net you over 300hp for the 4.3 and well over that for the 5.5K. The other option is get a good second hand 450 ironblock, cheap as chips, and put a SC on it controlled with MSII will easily break the rear tires loose.
OZBENZ - Australian Mercedes-Benz Forums • View topic - supercharged 450SLC 5.0
something like this. The engines are tough enough that if your get one in good nick you wont have to do any expensive changed ot the inside of it to handle the SC power. 10psi+ boost is easily handled by the stock engine, the guy in the link has had it up to 17psi+.
With the exhaust, mine is currently from the down pipes 2x 2" with resonators going into a single 3" pipe with a spiral pipe(removes the drone) and a flow thru muffler at the rear. Turns heads when i drive past, in a good way
silent cruising at 70mph+ on the freeway