Here's the updated schematic.
This is a really great project. I'm looking forward to see how it turns out.
Looking at your schematic, One thing I noticed is that there is no provision for a wide band controller. If you plan on using a WBO2, you're going to need the controller. Even though MS says it works with a narrow band sensor, I wouldn't recommend it. Whatever money you save up front, you're going to end up spending later in extra time and effort trying to tune it. This is the WBO2 I'm using.
I don't think the relay board is necessary. Most of your wiring will be coming straight out of the MS box. My whole setup uses 1 single bosch relay.
TBI is ok if it gets you on the road, but MPFI makes a world of difference. I know its complicated on older engines that never had an off the shelf fuel rail but I would try to find a work around.
I would budget about $500 for the complete setup. Thats how much my MS2 setup cost and that was using a lot of JY parts like injectors, sensors, plugs, wiring etc.
I would mount the intake air temp sensor outside the engine bay. The problem I ran into was heat soak after parking a hot car for about 20-30 minutes. MS is extremely aggressive with the air temp compensation. So for example when the temp under the hood gets up to 140f, it reduces fuel by ~20%. This causes the engine to run extremely lean for the first few minutes until enough air flows through the manifold to cool it off. I have my air temp sensor mounted under the front bumper and works very well.
87 300D turbo + 5spd
93 190e 2.3 + Megasquirt 1
92 190e 2.6 5spd + Megasquirt 2 (parted out, history)
97 E300 DIESEL
02 C320 VAGEN :the ugly one!