Well I have raced in 1990-1992 a 300 SE Fintailer in the European classic car championship (240 Din PS, 5-Speed, Coilsprings), afterwards sold in the Netherlands.
Well Carlsoon raced a W123 Coupe 280 E in rallies with eletronik fuel injection.
If you want a low budget Mercedes racer look for a W123 280 CE-5-speed. Get hot cams (Amg-profile) and ported and you end up with 205 Din-HP easily. Better to get it Megasquirted using the D-jet aircollector. With nothing in and the saftey-cage it will be around 1100 kg. They are many different typs of coils, shocks, wheels still in production in europe for this car. Brake up-grade comes from the W126 (300mm) at the front. Diffs are in several rations easy to find. And a good prepared W123 has a great set-up and grip too. My father had a 280 E AMG (1980), it was a very fast car and it was my first driving experience. Perhaps I had to make a 280 CE for my self!!!!
In germany there where some w114 racing cars but nothing serious.
In the mercedes race department there were some erperiments with a 280 Ce 5.0 for rally but the homologation costs were to high. The M117 conversion ist straight forward in the M123, in Hamburg they made them on request.
In the netherlands the made R107 rally and track replicas too (300 HP- with large plastik wheelarches).