I don't necessarily want to race the car, just curious as to what I COULD do. Everyone knows older mercs aren't exactly "off the line" cars, just wanted to do something a little different. ... what's wrong with "hot rodding" it? After all Mercedes has built many championship race cars that pushed boundaries and limits, they aren't all for grandpa's. .
Only until recently, Mercedes was built for grandpas (my opinion). I test drove a C280 a decade back, and even though it was turbo'ed, the thing was a slouch. The salesman noted that most of his products were aimed at the older, more refined man and his driving needs. I left and bought myself a BMW two seater.
If you hot rod your car, you won't be blazing any trails or doing anything out of the ordinary. But for reasons I can not comprehend, Mercedes' of these years have built up some sort of mystique as classic, timeless and should-not-be-touched-or-modded rolling artwork. To that, I say bull$hit. Chop, mangle, repaint and upgrade your car to your liking, and to heck with the folks that moan about it. Unless you own a Gullwing, it's unlikely you'll end up at Pebble Beach and selling it for $500k.
There's an Aussie on this thread who put a turbo'ed Chevy small block into his 108 (Hi Drew - or was it a 111?), and folks bemoan the ruination of a once great car. The "only" conversion you should do is a more modern Benz motor in the older chassis. BS, I say to that too.
I challenge you to find a Mercedes piston for the same price as an American one, a crank for the same price, etc etc. It's not as if Mercedes used better or different metals or forging techniques - the extra $$ you pay for Mercedes parts is because of the name. Take an OEM, Mercedes approved fuel pump for my 108 - new, straight from the classic center or dealership, the cost will range from $650-$900. However, an external fuel pump is an external fuel pump, and as long as you reach the minimum pressure and volume required for the engine to run, you're good. Summit Racing sells a pump that would work for my 108, and the thing, plus a few other addons I'd want, costs $60 and some change.
I would recommend you take stock in what you have, and look for ways to fix or improve it, make it better, etc. Kavadarci's spring lowering idea is a great example - cheap, effective, looks good. He did some headlight conversions that are awesome too, but a purist would have a fit.
I'm not a purist, BTW. I have plans for a 300SEL and a small block Chevy...
Hot rod options for your car - just about none, off the shelf. Megasquirt has some products you could use, and there are threads here that outline how some folks have done it. If you have mediocre welding or fabrication skills, consider taking out the old drive train and swapping in a modern V6 or small block V8. Get into Hot Rod magazine, and you'll find a metric ton of vendors who make standalone engine and transmission controllers, wiring harnesses and other support gear for such a swap. AND, modern engines (I'm talking American here) have a ton of support, re-engineering sites, mod sites, etc etc. Rolling into an atypical repair shop with a stock Mercedes and you're likely to be met with scratched heads and someone telling you they don't have literature on the thing. Do the same with your Mercedes and its American engine, and you'll be back on the road in no time flat.
For my $.02, Mercedes made good motors for their day, and the body lines are indeed classic. But the cars are indeed underpowered and more or less belong in the right lane. I would restore, mod, change and upgrade everything under the hood and inside the car, but leave the body unchanged.